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REAL ESTATE 



TO COMPLETE ACQUISITION IN CERTAIN CASES 



HEARING 

BEFORE A 

SUBCOMMITTEE OF THE 
COMMITTEE ON MILITARY AFFAIRS 

HOUSE OF REPRESENTATIVES 

SIXTY-SEVENTH C< INGRESS 
FIRST SESSION 



SUBCOMMITTEE 

JOHN C. McKENZlE, Illinois, Chairman. 
FRANK L. GREENE, Vermont. WILLIAM J. FIELDS, Kentucky. 

W. FRANK JAMES, Michigan. HUBERT F. FISHER, Tennessee. 

JOHN F. MILLER, Washington. 

Howard F. Sedgwick, Clerk. 



w 



WASHINGTON 

GOVERNMENT PRINTING OFFICE 

1921 



LIBRARY OF CONGRESS 
RECEIVED 

NOV 1 9 192 

DOCUMENTS DIVISION 






INDEX TO WITNESSES. 



Page. 

Baetjer, Harry N 52-67 

Brooks, Walter B 52-67 

Bussche, Maj. C. F. von dem ll-14,25,27,29HU,42-43,65-€7 

Carson, Brig. Gen. John M 3,14,20,22,26 29-41,51,56 

Dallam, D. E 4-14 

Fuller, Hon. Charles E 44-51 

Gilmore, Col. W. E 14-29 

Patterson, Hon. F. F., jr 41-42 

Sutton, J. Howard 52 

Williams. Col 18-24 

1 



EEAL ESTATE. 



House or Representatives, 
Subcommittee or the Committee on Military Affairs, 

Monday, May 23, 1921. 
The subcommittee met at 10 o'clock a. m., Hon. John C. McKenzie 
(chairman) presiding. 

Mr. McKenzie. The hearing is on the bill H. E. 204, " To amend 
the Army appropriation act, approved July 11, 1919, so as to relieve 
appropriations for the completion of the acquisition of real estate in 
certain cases and making additional appropriations therefor." 

STATEMENT OF BRIG. GEN. JOHN M. CARSON, QUARTERMASTER 

CORPS. 

Brig. Gen. Carson. Mr. Chairman, the amounts asked for in this 
bill (H. It. 204) are for the purpose of completing obligations incurred 
by the War Department during the process of acquiring the real estate 
upon which the various projects are located. In some instances the 
property was under contract; in others it had been requisitioned at the 
time of the passage of the act of July 11, 1919, which prevented any 
further moneys being expended for the purchase of real estate by the 
War Department. In all cases the War Department is definitely ob- 
ligated for the amounts, and this bill in no way contemplates the pur- 
chase of any additional real estate, but is solely based on the idea of 
completing obligations already made and protecting the large invest- 
ments on the various sites involved. 

The power of requisition was conferred upon the President of the 
United States by the act of Congress approved August 10, 1917 (40 
Stat., 27G, 279). It has been held that the service of a requisition 
vested fee-simple title to the real estate forthwith in the United States 
and thereby obligated the United States to pay just compensation to 
the owner for his property. The power of requisition Avas ultilized 
only in cases where a price could not be agreed upon. The matter was 
then heard by the War Department board of appraisers, sitting 
somewhat in the nature of a court of claims and making an award 
based on the evidence presented by both parties to the dispute. In 
all cases of requisition such an award has been made, and it would 
seem as though the United States was definitely obligated to make 
payment. 

This explains the necessity for the appropriations asked for in this 
bill now before the committee. 

3 



4 REAL ESTATE TO COMPLETE ACQUISITION IN CERTAIN CASES. 

STATEMENT OF MR. D. E. DALLAM, 514 WALNUT STREET 
PHILADELPHIA, PA. 

Mr. McKexzie. Mr. Dallam, you have appeared before the com- 
mittee at this time in relation to the item in the bill set out in line 14, 
page 2, of the bill, "For Army supply base, Philadelphia, Pa., 
$766,937." 

Mr. Dallam. Yes, sir ; that is the money that we hope to get out of 
that item. 

Mr. McKexzie. We will be glad to hear what you have to say. 

Mr. Dallam. I will try to make it very brief." In 1919 the Green 
wich Real Estate Co., of which Mr. Burroughs is president, held about 
143 or 144 acres of ground in one lot, practically at the foot of Ore- 
gon Avenue, Philadelphia. I have been endeavoring to sell it, but 
could not sell it except as one entirety, at $1,000,000. We understood 
that the Government had been investigating it with other sites, and 
I placed myself in communication with the Government. They very 
politely told me that they were interested in it, and we had consid- 
erable correspondence upon the subject. They were interested in it, 
but they would not take it all, and they thought that it was of such 
value that they should not buy it directty, but that they should con- 
demn it. 

Subsequently, in July, 1918, they took possession of the full tract, 
practically, to put improvements upon the river front, and they asked 
me for permission to use the balance of the ground at a rental. I 
said, " Certainly, if you pay the taxes on it, j^ou can use it as long as 
you want it." We then subsequently arranged for their propor- 
tionate share of the taxes, our property having been assessed in a 
lump. Their proportionate share of the taxes for 1918 was $800, and 
they promised to send us that money. In the spring of 1919 they 
said, ""As to this property west of Delaware Avenue which we have 
rented from you, we have concluded to take it in fee." I said, "All 
right," and they negotiated a price or they gave me a price. 

Mr. McKexzie. Who negotiated with you? 

Mr. Dallam. Here is the contract [indicating], 

Mr. McKexzie. A representative of the War Department nego- 
tiated with you ? 

Mr. Dallam. Yes, sir. 

Mr. Miller. Who were those representatives? 

Mr. Dallam. That contract of sale shows for itself. 

Mr. Miller. Does that contract show the names of the parties? 

Mr. Dallam. Yes, sir. There was a long correspondence. The 
first correspondence is signed by Gilbert F. Woods, chief of the Eeal 
Estate Section, and the contract for sale is also signed by G. F. 
Woods. 

It is all in writing. They said that they would pay for it out of 
the appropriation for 1919. They said that they had the money and 
wanted the property. I said to them, " Put it in writing." There 
were one or two contracts of sale sent to me which I declined to 
accept. Finally we got one that was acceptable, which I signed. They 
signed it on June 27, 1919. They said that I was to get the money on 
June 30, but I did not get the money on June 30. I kept writing for 
it, and finally on July 19, or some date subsequent to that, Congress 
passed an act prohibiting the purchase of any more real estate. 



REAL ESTATE TO COMPLETE ACQUISITION IN CERTAIN CASES. 5 

Mr. McKenzie. Was that on July 19 ? 

Mr. Dallam. It was sometime in Jury, and then everything was 
entirely out. I went to Washington and said to them, " Give me my 
contract back," and they said, " No, we will get a bill." They had 
introduced a bill in Congress, but it was amended to death and finally 
it was not passed. Then a bill was introduced in the last Congress 
almost identical with it, but it was not reached. Now it is included 
in this bill. I have gone to the headquarters, and I as very courte- 
ously treated. I said to them. " If you gentlemen do not want this 
land, give it back to me." They said, " We must have it for the 
classification yard, and we hope that we will get a bill through." 

Mr. McKenzie. Let me ask you a few questions. 

Mr. Dallam. Let me say also, Mr. Chairman, that I have here the 
contract covering the adjoining piece of property, belonging to the 
Grove Oil Co., contracted for on the same terms, involving $4,500. 
That is also included here. Here is their contract now [exhibiting 
it], and it is in the same form as the other. They agree to pay for 
that land $4,500, but we have never received the money for it and we 
can not get the ground back. There are other people concerned, or 
other adjoining property owners, but I only represent profession- 
ally Mr. Burrough, or the Greenwich Real Estate Co. and the Grove 
Oil Co. 

Therefore, there are two contracts which I represent here, and in 
regard to which I would like to have something done. One involves 
$315,000, and that speaks for itself. It specifies interest and also 
$800 for taxes for the preceding year, which we have paid. The 
taxes for 1919, 1920, and 1921 are accumulating against the property, 
which, necessarily, the Government ought to pay and which they will 
have to pay if they take title as of July 19, according to the contract. 

Mr. McKenzie. You have no claim now for that, have you? 

Mr. Dallam. I have not said a word about the taxes, but if you 
get the title we will not pay the taxes. 

Mr. McKenzie. Let me ask you a few brief questions. These con- 
tracts were entered into for the purchase of this property prior to 
July 19, 1919? 

Mr. Dallam. Yes, sir. 

Mr. McKenzie. Or on July 11, 1919? 

Mr. Dallam. Yes, sir; they were entered into in the spring, and 
that one was finally signed on June 27. I had correspondence with 
them during March, April, and May, and they had been in possession 
since July, 1918. • 

Mr. McKenzie. It was a complete contract of purchase? 

Mr. Dallam. Yes, sir ; a complete contract of purchase. 

Mr. McKenzie. For what amount of money? 

Mr. Dallam. $315,000. 

Mr. McKenzie. Now, then, their contention, as I understand it. is 
that the limitations put on the appropriation bill of July 11, 1919, 
the purpose of which was to prevent the purchase of any more real 
estate, prevented the purchase of this property ; but, as I understand 
it, this property had been purchased although it had not been paid 
for. 

Mr. Dallam. Yes, sir ; prior to that time. 

Mr. McKenzie. Your claim here, however, is for $766,937. 



6 REAL ESTATE TO COMPLETE ACQUISITION IN CERTAIN CASES. 

Mr. Dallam. That covers a whole lot of things at Philadelphia. 
I do not know what all of them are. 

Mr. McKenzie. Your item in that total amount is $315,000? 

Mr. Dallam. That is the only contract that I have in writing. 
Now, I will go further, if you will allow me 

Mr. McKenzie (interposing). What we want to get at is your 
claim. Your claim for the sale of this property amounts to $315,000. 

Mr. Dallam. $315,000; yes, sir; and $4,500 for the Grove Oil Co. 
Those are the claims that I represent. 

Mr. McKenzie. Have you any other claims ? 

Mr. Dallam. We have a claim 

Mr. McKenzie (interposing). In other words, we want to know 
what this money is to be expended for. 

Mr. Dallam. I do not know. Now. on this water-front property, 
the Government has erected $11,000,000 piers, etc. Thev have spent 
$11,000,000 there. The $315,000 contract covers a part of this up- 
per tract, or west tract. 

Mr. McKenzie. When you refer to the $315,000 transaction, was 
that an absolute purchase? 

Mr. Dallam. That is what we are claiming now. Now, you asked 
me about the other. Under this, they had a board of appraisal 
and took it under condemnation proceedings. That is in litigation 
now. In connection with that litigation, they sent three gentle- 
men there, as the Joint Board of Army Appraisers, and for prop- 
erty upon which we paid taxes on the basis of a valuation of $550,000, 
they awarded us $285,000. 

Mr. McKenzie. That is another piece of property? 

Mr. Dallam. That is property lying on the front. That is the 
property that they took on condemnation. Now. the condemnation 
act, under which they proceeded, requires that the President shall 
tender to the owner 75 per cent of the award, and gives the owner 
the right to sue for the balance. I do not attempt to deal with you 
as a lawyer, because I am a real estate man : but the contention of 
the Philadelphia courts has been that we have no rights and that 
we can do nothing until that 75 per cent is paid, and as that has 
not been offered to us, nothing has been done. As I understand it, 
although I am only assuming this, that 75 per cent on our claim 
and on other claims is to be paid out of the balance of this money 
in order to put the claimants in a position to bring suit. 

Mr. McKenzie. Are you willing to take the $285,000? 

Mr. Dallam. No, sir; not at all nor under any circumstances. 

Mr. McKenzie. You are not satisfied with the award? 

Mr. Dallam. No, sir: and we are coming before this committee 
for the purpose of getting sufficient to pay us this $315,000 and the 
$4,500 on account of the property of the "Grove Oil Co. We want 
either that, or to have our land given back to us. They have clone 
nothing except to fill it in. One of the buildings may overlap it 
to some extent. 

Mr. McKenzie. You would be willing to have Congress pass a 
law directing the War Department to turn back to vou the land 
covered by the claim of $315,000 and the claim of $4,500? 

Mr. Dallam. It depends on what they turn back to us. Our con- 
tention has always been that this property should be used as an en- 
tirety—that is, the property west of the Avenue. As to the property 



REAL ESTATE — TO COMPLETE ACQUISITION TX CERTAIN CASES. 7 

east of the Avenue, because of this litigation, they have given us or 
offered us $285,000, and the city has assessed it for taxation at 
$550,000, and a jury can settle that. As to the property west of the 
Avenue, we contend that it should be used as one property. They 
have gone on the property there, and have closed streets that had 
been opened since 1792, and they have erected on a part of it some 
improvements. I do not care for those improvements at all, and if 
they are to give us back our property, we want all of it back. Other- 
wise, I would say let us go out and say what of that property we 
will sell to the Government. The property is assessed in various 
amounts, aggregating on the property for which they agreed to pay 
$315,000, the sum of $275,000. 

Mr. McKenzie. I want to get this thing clear in my mind : Would 
you be willing for the War Department to cancel its claims to all 
the lands— not only those lands under contract for $315,000, but all 
of it — and dismiss the condemnation proceeding and permit you to 
step right in and take possession of the real estate that you owned 
prior to any of those actions being taken? Would you be satisfied 
with that? 

Mr. Dallam. Yes, sir; but you have spent $11,000,000 in improve- 
ments, and we do not want your property. I do not want what you 
spent there, and you have spent $11,000,000 on it. This plat [indi- 
cating] will show the situation. I went to them and said, " Let us 
give you this land back | indicating] you say that you are boss, with 
nobody over you except the Secretary of War." I said to them, 
" Give us back this property." This property is under condemnation 
proceeding, and we are being assessed for taxes on it upon the basis 
of $550,000, and. of course, Ave will not take $285,000 for it. We will 
have a jury to pass upon that. Now. you have spent $11,000,000 on 
this property [indicating], and yon will not give it up. These are 
terminal warehouses [indicating] and this [indicating] is the classi- 
fication yard, which has simply been filled in. You have erected a 
power house at this corner [indicating]. 

Mr. McKenzie. If the Government should retain this property 
[indicating], they would have to retain this [indicating]. 

Mr. Dallam. Yes. sir; that is what some people tell us. Of course, 
that is a technical question. This [indicating] is the property of the 
Grove Oil Co., and beyond this, to League Island, there is nothing 
but the Grand Union Freight Yard of all the railroad companies. 
There are no improvements south of here [indicating]. There are 
three manufacturing plants in here [indicating]. The Pennsylvania 
Railroad Co. owns this property [indicating]. There is nothing here 
until you strike the Greenwich Real Estate Co.'s tract. That [indi- 
cating] is the property you took from us. Everything else was 
filled up. and we have been holding this tract as an entirety since 
1855. We have paid the city $285,000 in taxes alone on this property. 
What we want you to do, and I think Mr. Burroughs will agree to 
that, is simply to give us the $315,000, and then we will settle the 
other by due process of law whenever that occurs and wherever it 
occurs. It will be in a United States court, and you will get justice 
as well as we. As I have said, we are assessed for taxation on that 
property on the basis of $550,000. and we most pertainly will not 
take $285,000 for it. 



8 REAL ESTATE TO COMPLETE ACQUISITION IX CERTAIN CASES. 

Mr. McKenzie. Of course, we are not trying the condemnation 
suit. 

Mr. Dallam. No, sir; that will be tried in court. 

Mr. McKenzie. This item of $706,000 covers the condemnation 
proceeding ? 

Mr. Dallam. Yes, sir; the whole proceeding. There are other 
properties involved. 

Mr. McKenzie. I presume it would not be impertinent to ask what 
the property cost you. 

Mr. Dallam. I do not know. T was here in 1S55, but I was not of 
an age to take care of this. This whole property was originally 
bought by people connected with the Pennsylvania Railroad Co. 
They sold to the Pennsylvania Railroad Co. a sufficient amount of it 
for their coal docks, then they sold to another Pennsylvania cor- 
poration, or the Pennsylvania Salt Co., sufficient land for their 
purposes. The balance of it has been lying here idle. What it cost, 
I do not know, but I know that we have paid that amount of taxes 
upon it. We have nothing but rich men behind it, and every year 
we have paid an Irishman's dividend and of necessity have paid the 
taxes. We will not get back what we have paid on it in the way of 
taxes and interest if we get $1,000,000, as it is appraised. 

Mr. McKenzie. When the Government took possession of it, it 
was vacant land, and it was held by you gentlemen with a view 
to 

Mr. Dallam (interposing). With a view to using it for large 
plants, like the manufacturing plants that are located alongside it. 

Mr. McKenzie. And you placed a rather high valuation upon it? 

Mr. Dallam. No, sir ; we did not do that, but the city put the valua- 
tion on it. We did not want to pay any more taxes than was 
necessary. 

Mr. McKenzie. You thought that it was so located that it was 
valuable? 

Mr. Dallam. Undoubtedly. 

Mr. McKenzie. And that some time, sooner or later, you could sell 
it to advantage? 

Mr. Dallam. It is the only property there that is not improved, 
and that is the reason the Government bought it. 

Mr. McKenzie. You want it settled up in some way ? 

Mr. Dallam. In some way, for mercy's sake. 

Mr. Miller. You represent the Grove Oil Co.'s tract? 

Mr. Dallam. Yes, sir; the Grove Oil Co.'s tract adjoining this. 

Mr. Miller. How many acres are involved in this? The tracts 
appear to contain 69 and a fraction acres and 6 and a fraction acres. 

Mr. Dallam. Yes, sir ; that is what those two tracts contain. 

Mr. Miller. There are 69.959 acres in one tract? 

Mr. Dallam. Yes, sir. 

Mr. Miller. And 6 and a fraction acres in the other? 

Mr. Dallam. Yes, sir. 

Mr. Miller. The entire property consisting of 75 and a fraction 
acres? 

Mr. Dallam. Yes, sir. 

Mr. Miller. What do you know about the Grove Oil Co. tract ? 

Mr. Dallam. That is another tract of adjoining property. 



REAL ESTATE TO COMPLETE ACQUISITION IN CERTAIN CASES. 9 

Mr. Miller. This tract of 75 and a fraction acres is all involved in 
that contract of June 27, 1919? 

Mr. Dallam. Yes, sir; in that sum of $315,000. 

Mr. Miller. This 75 and a fraction acres is what vou offered them 
under this contract for $315,000? 

Mr. Dallam. Yes, sir; the whole thing as an entirety. This prop- 
erty comes from here [indicating] to Swanson Street. Here is prop- 
erty owned by the Pennsylvania Railroad Co. [indicating], and there 
I indicating] on the other side is property of the Baltimore & Ohio 
1'ailroad. This property is worth more than property over here 
[indicating] with no railroad connection, and, as you will see, it 
.should be sold as one title and used for manufacturing purposes. 
We have never offered this property except as an entirety. 

Mr. Miller. You maintain that the Government owes you $315,000 
for this 75 and a fraction acres ? 

Mr. Dallam. Yes, sir. 

Mr. Miller. And you say that the contract covering this 75 and a 
fraction acres of land was orally entered into? 

Mr. Dallam. Yes, sir. 

Mr. Miller. When was it orally entered into? 

Mr. Dallam. It was orallv entered into probably in March. 

Mr. Miller. March, 1919'? 

Mr. Dallam. Yes, sir. 

Mr. Miller. Now, you say that after that oral contract was entered 
into, the Government was to pay the taxes? 

Mr. Dallam. They were to pay the taxes before that. They took 
possession the year before. 

Mr. Miller.' That would be about $800 a year? 

Mr. Dallam. No, sir ; not at all. 

Mr. Miller. I thought you said it amounted to $800 a year. 

Mr. Dallam. We had paid our taxes for 1918 before the Govern- 
ment came over there, and we apportioned the taxes covering this 76 
acres. We had 150 acres and we agreed upon that apportionment. 
It was a perfectly fair apportionment, and it was agreed that $800 
represented their share of the taxes assessed on that property in 1918. 
They agreed to that. 

Mr. Miller. Their proportion of the taxes on that 75-acre tract for 
1918 was $800? 

Mr. Dallam. Yes, sir ; for the balance of 1918. Here is the contract 
of March, 1918. This reads, "The offer in the foregoing letter is 
hereby accepted." That was signed by G. F. Woods. They never 
signed the contract until June 27. That [indicating] is the letter from 
the president of the company, and I signed it. 

Mr. McKenzie. The contract you have just been discussing with 
Mr. Miller involves the $315,000? 

Mr. Dallam. Yes, sir. 

Mr. McKenzie. The other contract which you have there, of which 
the purchase price is $4,500, involves about one-half acre of land? 

Mr. Dallam. Yes, sir. 

Mr. McKenzie. And in the condemnation proceedings for £he other 
tract, the board of appraisers fixed the valuation at $285,000? 

Mr. Dallam. Yes, sir. 

Mr. McKenzie. What do you want for that property, or what is 
your idea in regard to that ? 



10 REAL ESTATE TO COMPLETE ACQUISITION IX CERTAIN. CASES. 

Mr. Dallam. We asked for that property $650,000. 

Mr. McKenzie. You want $650,000 instead of $285,000? 

Mr. Dallam. Yes, sir. We had a tract of land containing 144 
acres of which we gave them the refusal. That property was held 
at $1,000,000. They took us up on our proffer. That was done by 
some people who were endeavoring to finance the Government, and 
that option expired. Then, when the Government said to me, "We 
only want the front." Ave went over the valuation T went to the 
Board of Tax Regents, and said, "You have this property assessed. 
and the Government only wants the front. What is the front worth 
as compared with the back?" They estimated that two-thirds of 
the assessment was on the front property, and that made it $650,000 
for the front and $350,000 for the back property, upon the basis of 
the valuation of $1,000,000. That made up the $1,000,000. When 
the Government came to buy this seventy-odd acres here [indicating], 
they said, "We will take it acre for acre on the basis of $350,000," 
but we would not do that, because they would be cutting us off from 
the front. They were taking three-fourths of it. and we said that it 
was worth at least 90 per cent of the gross amount, and they accepted 
it. That is the reason they gave us 90 per cent of the amount, or 90 
per cent of $350,000. I could get people to swear to-day that it is 
worth 50 cents per foot. 

What Ave want to do is to get rid of it. We want the $315,000, and 
are willing for the other matter to take care of itself. Let me shoAv 
you the map that they served on us in the matter [indicating]. Here 
[indicating] is the property to be acquired by the United States 
Government. The property that they bought from us at $315,000 is 
the property indicated in red. We own the property Avest of this 
[indicating]. This little $4,500 tract is in here [indicating] and 
this [indicating] belongs to the New York Agricultural Co. They 
also took this property of the Pennsylvania Salt Co. They agreed 
to giA'e us $315,000. just what Ave asked. They could not get it any 
cheaper, and they knew it. I do not hesitate to say that if Ave could 
put a jury on it, we could get more. We gave them that price the 
year before, or in January and February, and Ave could not get a 
contract in writing until June. There Avas a whole lot of correspond- 
ence, but what Avas the use of that? 

Mr. McKenzie.. Going back to your ansAver, I do not think that 
I understand you fully : Do you mean to say that you wanted 
$650,000 for the tract that is under condemnation? 

Mr. Dallam. Yes, sir: it Avas assessed at $550,000. 

Mr. McKenzie. That would make $650,000— $315,000 and $4,500? 

Mr. Dallam. The $4,500 is another matter. That is the Grove 
Oil Co. matter. 

Mr. McKenzie. But it is included in this bill. 

Mr. Dallam. Yes. sir; I assume that it is. We asked $350,000 for 
that property, but they said they did not Avant to take all of it. What 
they took represented 90 per cent of it in value, and so they gaA~e us 
$315,000. 

Mr. McKenzie. Do you think that a jury in Philadelphia would 
give you $650,000 for the tract involved in the proceeding that is iioav 
pending in court ? 



REAL ESTATE TO COMPLETE ACQUISITION IN CERTAIN CASES. 11 

Mr. Dallam. I mean to say unhesitatingly that I could get people 
in there to testify that, and they would say they would give $50,000 
more for it. 

Mr. McKenzie. On this particular tract, improvements have been 
made ? 

Mr. Dallam. You have spent, supposedly, $11,000,000, and you 
have got to keep it. 

Mr. McKenzie. That all depends upon circumstances, or upon 
whether we have a need for it. 

Mr. Dallam. There has been an expenditure of $11,000,000 made 
upon this property. 

Mr. McKenzie. I think that is all. While you are here, I will be 
glad to have the officer of the Army make his statement right in con- 
nection with yours in regard to this particular property. 

STATEMENTS OF BRIG. GEN. J. M. CARSON, OFFICE OF THE QUAR- 
TERMASTER GENERAL, AND MAJ. C. F. VON DEM BUSSCHE. 

Maj. von dem Bussche. The whole project covers a total of 119.9 
acres, which was requisitioned in July, 1918, and upon which no pay- 
ments have been made. The improvements consist of three concrete 
piers, A, B, and C. Pier A is an open pier for the docking of vessels. 
Pier B is 1,500 feet long and 290 feet wide, upon which is erected a 
3-story reinforced concrete and brick pier shed, consisting of two 
wings, 96 and 102 feet long, respectively, separated by a court 46 feet 
wide, with a total floor area of 892,250 square feet gross. Pier C is an 
open shed, 1,320 feet long and 290 feet wide. The total gross area of 
open space on the piers is 578,600 square feet. There are two tracts 
of land at this place, one of which, comprising 88 acres, is under con- 
tract of purchase at the price of $380,870.50. The assessed valuation 
of this tract as of July, 1918, is $75,404.15, which purports to repre- 
sent 70 per cent of the real value of the land. The other tract, com- 
prising about 31 acres, was requisitioned, and awards to the amount 
of $315,410.90 were made by the War Department's board of ap- 
praisers, together with interest at the rate of 5 per cent from March 
11, 1919. Taking into consideration the interest and the fact that the 
owners of the requisitioned properties have instituted suit, it is esti- 
mated that the amount required will be approximately $766,937. The 
project was approved by the Secretary of War on June 28, 1918. 

Mr. McKenzie. That is the amount shown in the bill? 

Maj. von dem Bussche. Yes, sir. I might say that so far as Mr. 
Dallam's statement of the facts is concerned very careful estimates of 
the value of that property were made. We had experts to visit and 
value it, and the price offered Mr. Dallam was based upon the expert 
advice of local Philadelphia real estate men. Those gentlemen are 
no longer in the service, or the gentlemen who made the survey at 
that time are no longer in the service, but they are available as wit- 
nesses in connection with the condemnation proceeding. 

Mr. McKenzie. As I understand it, Mr. Dallam is satisfied to 
accept payment under the terms of the contract for the land covered 
by this particular contract, and that he will await the pleasure of the 
court in fixing the value of the remainder of the property. Now, if 
we should make this appropriation of $766,000 and the jury should 



12 REAL ESTATE TO COMPLETE ACQUISITION IN CERTAIN CASES. 

find that you have made too low a valuation, I presume that the only 
remedy would be by a deficiency. I imagine that it would require a 
deficiency to cover-it. 

Mr. Dallam. I do not want to go to the Court of Claims. 

Maj. von dem Bussche. The valuation of the property has been 
held to be as of the date of taking, without regard to the improve- 
ments placed thereon by the United States. It has been held in most 
condemnations that the valuation shall be as of the date of the taking 
of the property by the United States. In this case it will be the 
valuation of July, 1918. 

Mr. Dallam. That is the law of Pennsylvania. 

Mr. Greene. How far does the war situation itself enter into the 
making of that valuation? In other words, the Army may have 
gone upon a strip of unoccupied land that in ordinary peace times 
might have gone for 20 years longer without having any particular 
demand for it. 

Maj. von dem Bussche. That is true. 

Mr. Greene. Does the war-time demand enter as a part of the 
valuation, or is that considered in fixing the valuation? 

Maj. von dem Bussche. There can be no question but that the 
placing of such activities as we had at Philadelphia did greatly 
increase the value of the property all around. 

Air. Greene. What I mean is this: When 3 r ou first wanted to enter 
upon it, or undertook to buy it. did the price of the land increase 
because there was a war in progress and because it was valuable by 
reason of certain war activities? 

Maj. von dem Bussche. Undoubtedly it increased in value because 
the Government wanted it. That is a thing that we meet with every- 
where. Wherever the United States desires to purchase property 
the value of it immediately increases all the way from 100 per cent 
to 1,000 per cent. 

Mr. Greene. This may be more a question of ethics than of legis- 
lative policy, but the question is whether the Government is justified 
in going into a market and meeting its own competition there. 

Maj. von dem Bussche. In all of these purchases the department 
endeavors to secure an estimate from people conversant with values 
in the particular locality. This figure, which is assumed to represent 
the fair market value of the property, is a basis upon which the 
purchase is made, providing the owners are fair and willing to accept 
such appraisal. 

Mr. Greene. This is the unfortunate situation: We know that 
property may be lying idle and unimproved and held for speculative 
purposes, and then suddenly, because of the necessity of using the 
property for Government purposes, it takes on an artificial value. 
That is frequently the case where the property must be taken for 
some war use. 

Maj. von dem Bussche. I might say to you that experience in con- 
demnation cases already completed show that juries almost invariably 
have awarded the appraised value of the property. I recollect that 
in a case at Ancon, Ohio, the property owner held out for $600 per 
acre. We had the appraisal made by the local real estate board of 
Cincinnati, and their figure was $290 per acre. The award of the 
jury was $290 per acre. We had a similar case at Grand Eapids. 



REAL ESTATE TO COMPLETE ACQUISITION IN CERTAIN CASES. 13 

One of the property OAvners at the picric-acid plant held out for, I 
think, $192 per acre. The appraised value of the particular tract 
made by the local real estate people was $10 per acre, and the award 
was $40 per acre. 

Mr. Greene. How did those figures compare with the figures of the 
same local real estate people a few months before the war ? 

Maj. von dem Bussche. They were based on that. They were 
based absolutely on sales as far back as three years previous to that 
time. Of course, neither side could present in evidence what the 
Government had paid for real estate, but Ave considered prices paid 
for real estate during the past five years, and from that the value of 
the particular piece of property was determined. It was upon the 
basis of those valuations that the estimates were made. Then, in 
order to safeguard it and to eliminate any criticism, the department 
invariably asked the local real estate board to give its opinion as to 
the values. 

Mr. McKenzie. We are much obliged to you. 

Mr. Dallam. I am in that position, and I catch what the gentle- 
man has said. I am probably the nestor of the real estate business in 
Philadelphia. I have been engaged in it for 50 years, and I have 
been a member of boards making real estate appraisals. They do 
not want to call me into those appraisals, because I am too old- 
fashioned, or too low. At the time the Government came in there, it 
was the only property that they could get. I have sold everything 
that has been sold in there, and I sold property to the Pennsylvania 
Salt Co., at $16,000 per acre, just three years ago. The Government 
can take a part of that land as it is to-day and sell it for $10,000 per 
acre, and they are paying me less than $6,000 per acre. 

Mr. Greene. If anybody had undertaken to sell Mount Arrarat at 
a certain time, he could have gotten a very good price for it. 

Mr. Dallam. The best expression I have heard of that was the 
other day. The city is taking over a block of ground on which to 
build a library. They asked me what it was worth, and I said $1,000 
per foot. The first question they asked the owner was what did he 
pay for the ground, and he said, " It does not make any difference 
what I paid for it. If I had been around here I could have bought the 
whole town from William Penn for $250." Now, as I have said, we 
do not object to the condemnation. We are willing to go before a 
jury on that. The only point is to differentiate between the price in 
1918 and now. The last sale in 1918 was at about $500 per acre. 

Mr. Greene. What is the practice in Philadelphia in regard to the 
tax assessment valuations? Do j^ou have a recognized scale? In 
other words, do you increase the land valuation, or do you increase 
the tax rate ? 

Mr. Dallam. They do both. The law provides that they shall 
assess each piece of property on the basis of what it would sell for 
singly and alone for cash after due notice. That is the wording of 
the act. / 

Mr. Greene. How far would you take the figures of the tax valua- 
tion as indicating the true value of the land ? 

Mr. Dallam. They assume that it is about 75 or 80 per cent of the 
sale value of the land. 

Mr. Miller. What Government activities will be carried on at this 
place if the purchase should be completed ? 



14 REAL ESTATE TO COMPLETE ACQUISITION IX CERTAIN CASES. 

Gen. Carson. The Army Base at Philadelphia is used as a storage 
base and as a shipping point for Government supplies. 

Mr. Miller. Is there any similar Army activity in that neigh- 
borhood ? 

Gen. Carson, No nearer than New York. 

Mr. Miller. Are there any to the south ? 

(Ten. Carson. Yes, sir; at Norfolk. 

Mr. Miller. You have one at Philadelphia, one at New York, and 
one at Norfolk? 

Gen. ('arson. Yes, sir. There are two others. There is one at 
Charleston and another at Boston. 

Mr. Miller. That would make five Army activities of a similar 
character, or this one and four others? 

Gen. Carson. Yes, sir. 

Mr. Miller. They are in daily use now ? 

Gen. Carson. Yes, sir. 

STATEMENT OF COL. W. E. GILLMORE, CHIEF OF SUPPLY, AIR 

SERVICE. 

Gen. Carson. Col. Gillmore is here from the Air Service, and he 
will speak especially of one item in the bill, on page 3, for the ord- 
nance storage depot, at Middletown, Pa., $50,000. 

Mr. McKenzie. We have heard something about that, and we 
would like to have a brief statement in regard to it. 

Col. Gillmore. A brief statement of the present status at Middle- 
town ordnance depot is that in January, 1918, the Ordnance De- 
partment leased approximately 396 acres of land. That is the tract 
of land shown in here [indicating]. 

Mr. Miller. Where is Middletown? 

Col. Gillmore. Middletown is just below Harrisburg, Pa. 

Mr. Miller. The tract contains 396 acres? 

Col. Gillmore. Yes. sir. This tract was originally rented at the 
price of approximately $100 per acre per year. Now, Mr. Chairman, 
I woidd like to make this clear, that this was an Ordnance Depart- 
ment transaction, and not a transaction of the Air Service. I can 
tell you later why the Air Service is interested in it. They took 396.6 
acres on lease, and that lease has never been canceled, to the best of 
my knowledge. In August, 1918, suit was entered for the requisition- 
ing of 82 acres, on which they built their big ordnance storage plant. 
There was an award made by the War Department board of ap- 
praisers of approximately $39,000 for the 82 acres. The Harrisburg 
Real Estate Co. refused to accept the award, and therefore there has 
not been any payment made on account of it. It is in the status now 
of a contested award. 

Mr. McKenzie. Did this Harrisburg Real Estate Co. own the 
land, or did they lease it from the original owners? 

Col. Gillmore. I think the Harrisburg Real Estate Co. owned the 
land. 

Mr. Miller. How long had they owned it ( 

Col. Gillmore. Since 1915. The Ordnance Department's build- 
ings on this section of land, or the buildings and improvements, cost 
$1,325,000. Those are the buildings shown on here [indicating]. 



REAL, ESTATE TO COMPLETE ACQUISITION IX CERTAIN CASES. 15 

These two large buildings are of hollow-tile construction, or a little 
better construction than the ordinary temporary buildings. The Air 
Service built a depot at Micldletown, and that is shown over here 
[indicating]. 

Mr. McKenzie. When did they build it ? 

Col. Gillmore. That was built in 1918 also. We put in a pipe line 
across there [indicating] and a power line from the Ordnance De- 
partment here [indicating]. When the Ordnance Department, a 
little over a year ago, said that this property, so far as they were 
concerned, was surplus, the Air Service became interested in it for 
this reason : We wanted to concentrate ; we wanted to give up our 
establishment at Morrison, Va., the depot at Richmond, Va., and the 
one on Long Island and concentrate here at Middletown. In the 
first place, it is a wonderfully strategic location. It is back from the 
seaboard, where we would not be likely to be hit early. 

The railroad facilities are splendid, and 3*011 can see from the 
topography that it is about the only piece of level land in that vicin- 
ity. We already have a splendid supply depot and storage depot 
there, and we wanted to combine with it a repair depot. These 
buildings lend themselves to that kind of work very well without 
anything but the very nominal cost of converting it into a repair 
shop by the installation of machinery that we already have. 

Mr. Miller. When did it cease to be used bj T the Ordnance Depart- 
ment? 

Col. Gillmore. The Ordnance Department is gradually getting 
their supplies out of there. 

Mr. Miller. It would be available for your use ? 

Col. Gillmore. Yes, sir; it would be available. It struck me that 
it was a wonderfully economical proposition for the Government, 
and, following the tendency of Congress to concentrate such impor- 
tant activities, we thought that this was a very fine solution of the 
supply problem and repair problem of our service for the whole 
eastern and northeastern part of the country, or from Maine down 
to the Virginia capes. 

Mr. McKenzie. Why would you undertake to develop a repair 
station at this place instead of having your repairing done at the 
flying fields? 

Col. Gillmore. The difficulty in trying to have repairs clone at 
the flying fields is this, that you do not have good mechanics to do 
the repairing with 

Mr. McKenzie (interposing). You could get them there, could 
you not? 

Col. Gillmore. You might get them there, but you would have 
to scatter them. 

Mr. Miller. You would have to provide housing facilities. 

Col. Gillmore. No, sir ; I do not mean housing facilities, but you 
will not get the production program through so far as the major 
repairs are concerned. 

Mr. McKenzie. For instance, take Boiling Field, and you have 
a great many airplanes down there. Now, would it be your purpose 
to ship those airplanes to Middletown, Pa. ? 

Col. Gillmore. If it were a major repair; yes, sir. If the motor 
had been in the air for 150 hours, and where it was not a question of 
50916—21 2 



16 REAL ESTATE TO COMPLETE ACQUISITION IN CERTAIN CASES. 

minor repairs, but where the motor would have to be taken down, 
you would ship it into a place where you had mechanics who could 
do the major overhaul work. The same thing is true with respect 
to repairs to the fuselage and wings. 

Mr. McKenzie. I can not understand the economy in that sort of 
program. We have the same problem in connection with trucks 
and automobiles. The best place in the world for making repairs 
to trucks and automobiles is at the military post, and it seems to me 
if there is any place in the world where you want mechanics to over- 
haul flying machines it is at the flying field. 

Gen. Carson. If they had buildings available for repair shops 
at the flying fields, but they have not 

Mr. McKenzie (interposing). It would not cost much to put up 
such buildings as those. 

Mr. Greene. If you put in at each flying field the necessary repair 
installation and the force with which to make major repairs you 
would have a great many more men in the total than you would 
have if the work were centralized at one point. 

Col. Gillmore. Yes, sir. 

Mr. Greene. You would have the problem of making the neces- 
sary installations and employing the necessary expert labor at each 
flying field. 

Col. Gillmore. Yes, sir. 

Mr. Greene. Under this plan of consolidation, how many repair 
shops would you have ? 

Col. Gillmore. Three. 

Mr. Greene. Located near the flying fields? 

Col. Gillmore. In the big flying areas — that is, one in the East, one 
in Texas, one in Alabama, and one on the western coast. 

Mr. Greene. Located near industrial centers? 

Col. Gillmore. The one on the western coast is temporary. We are 
using the flying field there. 

Mr. Greene. Are they located near industrial plants, where the 
labor situation is easy? 

Col. Gillmore. Yes, sir ; the one in Alabama is in the city of Mont- 
gomery, and the one in Texas is at San Antonio. 

Mr. Greene. If you should install plants for making major repairs 
at the flying fields, would not that require some considerable outlay 
for the machinery and other equipment necessary in making such 
repairs ? 

Col. Gillmore. Yes, sir. 

Mr. Greene. There would be an overhead expense at every field? 
There would be a saving in the overhead expenses if the repairs were 
done at a centralized place rather than having them scattered all 
around ? 

Col. Gillmore. Yes, sir; you might consider that in comparison 
with the repairs shops of railroad companies. You would not have 
them to set up repairs shops at every point. 

Mr. Greene. Do you find that the cost of transporting the planes 
from the flying fields, where the disabilities occur, to the consolidated 
or centralized repair shop is less than the expense of having them 
repaired at the flying fields or the additional expense that would be 
involved in having them repaired at the flying fields ? 



REAL ESTATE TO COMPLETE ACQUISITION IN CERTAIN CASES. 17 

Col. Gillmore. Yes, sir. 

Mr. Greene, It would be cheaper to ship them to the central shop ? 

Col. Gillmore. Considering the concentration of the civilian per- 
sonnel, we find it cheaper. We can do this major overhaul work 
cheaper in that way. That is also due to the fact that we take out 
of the supply depot the material or a great deal of the material that 
is used in making the repairs. When we ship a new plane into a 
field to replace a wreck, for instance, then the major overhaul work 
comes into the repair depot. When we have the two together, as at 
Fairfield and at Montgomery, it is cheaper to ship it than to have 
the personnel at each one of the flying fields. 

Mr. Greene. There seems to be an important factor there to be 
determined. That is to say, it is cheaper to concentrate the sup- 
plies at three permanent major repair shops than to disperse those 
supplies over all the flying areas ? 

Col. Gillmore. Yes, sir. There is another thing that enters into 
it, which is a very major item, and that is that our plane equipment 
in storage deteriorates. A great deal of it we have to ship out for 
replacements, but it is not safe to ship it out after it has been in 
storage for a year or a year and a half without having it to go to the 
repair shop. That is true even where the material has not been 
used. Equipment that was manufactured in 1919 must go into the 
repair shop before being issued. 

Mr. McKenzie. I may be a little bit old-fashioned, but I have 
not been able to understand the economic logic or philosophy of a 
great business concern scattering its activities all over creation, in- 
stead of centralizing them. Therefore, I can not see the point you 
make in using the railroads as a parallel case to this, because the 
railroad has its shops, and especially its repair shops, right on its 
line, at the end of the division, where the engines must go. They 
naturally go into those division shops, and there they repair them 
and put them back in service. Now, in this case, whether it is a 
truck or a flying machine, they will take it away from the field of 
its activity or use, and ship it hundreds of miles across the country 
to some place that has no other activity except that of repairing the 
machines. Then it would be shipped back again to the place where 
it is to be used. If that is economy, or if you can do that for less 
money than you could have it repaired at the place where it is used, 
then I have the wrong view of it. 

Mr. Miller. I can see your criticism, but suppose the locomotive 
gets out of repair at the other end of the line. In that case, you 
ship it back to the repair shop, and you do not repair it on the 
ground where the breakdown occurs. 

Mr. McKenzie. If a flying machine goes down in the field, you 
would have to get it back to its home base. 

Mr. Greene. The question involves all of the factors that enter 
into the question of consolidation and concentration. One is the 
overhead expense which has to be provided at each place, and there 
will be a certain percentage of duplication of plants all over the 
country. There is the money that you have invested in the installa- 
tions in order to make repairs at the local flying fields, and much 
of the time the plant would be lying idle. When you come to bal- 



18 REAL ESTATE TO COMPLETE ACQUISITION IN CERTAIN CASES. 

ance it up in a bookkeeping way, I think you will find that the con- 
centration plan is cheaper. 

Mr. McKenzie. It seems to me that the same principle underlies 
the whole thing. Suppose in the old days a mule lost his shoe, and 
you could not shoe him at the place where he was used, but had to 
ship him several miles to a horseshoeing establishment. 

Col. Gillmore. Have you differentiated there between minor re- 
pairs and major repairs? Now, major repairs to a wing, means 
tearing the fabric off, putting in a new spar, new ribs, and things 
of that character. 

Mr. McKenzie. I beg your pardon for diverting you from your 
statement. 

Col. Gillmore. I am not an ordnance officer, and I am not as 
familiar with their problem in connection with this depot as I 
would be if it were one of ours, but here is the way it looks to me : 
The Ordnance Department has never settled with the Harrisburg 
Real Estate Co. for these properties. I have made a careful investi- 
gation of the facts, so far as I could, to get the information, and it 
looks to me as if the Government was liable for damages that would 
probably equal the price for which we can purchase the land. The 
Harrisburg Real Estate Co. and the Ordnance people could present 
that phase of it better than I can, but from my investigation of it, 
and from the fact that this acreage lease or original lease has never 
been canceled, and from the fact that we did go across there with 
a pipe line and power line, it looks as if it would result in an award, 
perhaps, in the Court of Claims, equal to what we could purchase 
the land for now, namely, about $240,000, and settle the whole 
proposition. 

Mr. McKenzie. Your item here is $50,000. 

Col. Gillmore. Yes, sir. That was put in by the Ordnance De- 
partment. 

Mr. McKenzie. Are there condemnation proceedings pending for 
the whole tract? 

Col. Gillmore. No, sir; requisition proceedings are pending on 
82 acres at the Ordnance depot and 31 acres at the Air Service 
depot. The remainder of it has never been settled, and it amounts 
to $100,000, and more, for rental. 

Mr. McKenzie. This bill would not take care of that ? 

Col. Gillmore. I think it would. 

Mr. McKenzie. You would want a direct authorization in here 
to purchase real estate? 

Col. Gillmore. Yes, sir; and to settle this claim with the Harris- 
burg Real Estate Co. 

Mr. McKenzie. It seems to me you would have to bring that mat- 
ter up in a separate bill, or as an amendment to this bill, authoriz- 
ing the War Department to go ahead and purchase the remainder 
of this land not covered by the requisition proceedings. That is not 
the purpose of this bill. The purpose of this bill is to enable the 
War Department to make settlement for or on account of contracts 
made prior to July 11, 1919. 

Col. Williams. The Secretary of War wrote a letter to the com- 
mittee asking that this bill be amended so as to include this item. 
It provides for an amendment to the bill, and suggests the exact 
amendment to go in so as to take care of this item in the bill. 



REAL ESTATE TO COMPLETE ACQUISITION IN CERTAIN CASES. 19 

Col. Gillmore. This was not prepared by me. 

Mr. McKenzie. Suppose you read that letter into the record. 

Gen. Carson. The letter of the Secretary of War is as follows: 

Wab Department, 
Washington, February 25, 1921. 
Hon. Julius Kahx, 

Chairman Committee on Military Affairs, 

House of Representatives. 

My Deab Mr. K.vhx : Near Middletown, Pa., and lying between the Pennsyl- 
vania Railroad and the Susquehanna River, is a tract of land .standing in the 
name of the Harrisburg Real Estate Co., containing 396.6 acres, on a portion of 
which there has been constructed warehouses and other buildings and improve- 
ments by the Ordnance Department and which now stands under the name of 
the Middletown Ordnance Reserve 1 >epot. This tract was taken by the Ordnance 
Department under a lease dated January IT, 1918. The rental was .$3,310 per 
month. The lease contained a renewal clause and an option to purchase the 
land at $500 per acre. In June, 1920, a reservation for $100,000 was set aside 
for rents, and $17,050 was paid to July 1, 1918. No rent has since' been paid, and 
the $82,950 remaining was carried over to the fiscal year ending June 30, 1921. 
In August. 1918, condemnation proceedings were commenced for acquiring S2.1 
acres of this tract on which the warehouses and other improvements had been 
constructed. The proceedings resulted in an award in favor of the Harrisburg 
Real Estate Co. of $3!). oil", with interest from the date of commencement of the 
proceed ngs. The landowner refused to accept the award, no payment has been 
made thereon, and Congress has made no appropriation to cover such payment. 

H. It. 13929, introduced in the House of Representatives May 4, 1920, and 
which was never passed, contained an item of $50,000 to be appropriated to 
cover the acquisit on of tins 82.1 acres and a small plot containing 5.45 acres 
requisitioned from Dr. W. H. Seibert, for which an award has been made, 
amounting, with interest, to approximately $3,000. The proposed bill amending 
H. R. 13112!) also contained this item. The Ordnance Department, after the 
acquisition of this land, proposes to turn it over, with the buildings thereon, to 
the Air Service. 

The Air Service in 1918 constructed a depol at Middletown, Pa., now desig- 
nated as Middletown Air Intermediate Depot, on 31.2 acres of land belonging 
to the Harrisburg Real Estate Co. and adjoining the land occupied by the 
Ordnance Department. The Air Service also extended to the east, taking up 
about 20 acres of building lots known as Riefs extens'on. The whole plot was 
requisitioned and awards of damages for permanent possession of 1 he land were 
made and accepted by all the landowners except the Harrisburg Real Estate Co. 
That company refused to accept an award Of $12,480 for the 31.2 acres but 
received :;s 7." per cent of the award $10,586.16. The sum of $21,979.49 was paid 
for lots acquired in Riefs extension. 

o u February 2s, 1920, Congress appropriated $50,000 for the purchase of the 
real estate of the aviation supply depot. The sum paid for land acquired in 
Riefs extension and the sum paid to the Harrisburg Real Estate Co. as 17, per 
cent of their award was paid from the $50,000 appropriated, and a balance now 
remains from this appropriation of $17,434.37. which is available to pay any 
award the court may make for the 31.2 acres acquired from the Harrisburg 
Real Estate Co. 

Xo action has been taken toward acquiring the 314.5 acres used by the Ord- 
nance Department, and no item covering it was included in H. R. 13929 or the 
proposed bill amending it, as the Government was in no way obligated to acquire 
this land. A part of this land has been used by both the Ordnance Department 
and Air Service, and is now in use as a flying field, and there are temporary 
hangars thereon. There is also a water main, supplying the aviation depot, 
running through the land and an electric power line crossing it. 

The owners claim that the Government is still in possession of the ent're 
tract, holding over under the original lease of January 17. 1918, and that there 
was an accrued rental of three years on January 7. 1921. of $118,960, of which 
sum $17,050 only has been paid. 

The continuation of a flying field in connection with the combined aviation 
supply and repair depot is not only desirable but essential, and it will be neces- 
sary to acquire land for that purpose. If appropriations are not made available 
for purchasing this land at this time it will be necessary to ask Congress at 



20 REAL ESTATE TO COMPLETE ACQUISITION IN CERTAIN CASES. 

some later date for sufficient funds to purchase either this or other land adjoin- 
ing the Middletown Air Intermediate Depot, find in the meantime values of 
adjoining land may he greatly increased. 

The ordnance Department has erected upon its tract of land some very 
substantial buildings, at a cost of $1,372,180, and to make the plant com- 
plete for use as an Air Service depot and flying field the land lying between 
the two should be acquired rather than additional land elsewhere. The Har- 
risburg Real Estate Co. has offered to make settlement of all their claims and 
convey title to the entire 428 acres, including the S2 acres and the 31 acres, 
concerning both of which there is dispute as to value, for the sum of $240,000, 
and to credit the amount of $10,536.16 already received as 75 per cent of the 
award made on the 31.2 acres. This would leave a net amount of $229,414, 
for which they would deliver good title to the entire tract and cancel all 
claims for rent and settle all disputes as to value now pending in court. The 
land requisitioned from Dr. Seibert would require $3,000 additional, or a total 
of $232,414. As there are unpaid accrued rentals on the land of the Harris- 
burg Real Estate Co. approximating $100,000 and as $50,000 would be required 
to acquire the land on which the Ordnance Department has erected improve- 
ments, and approximately $30,000 more to acquire that occupied by the Middle- 
town Air Intermediate Depot, it would seem to be in the interests of economy 
to ask for appropriations to enable the War Department to accept the settle- 
ment offered by the Harrisburg Real Estate Co. In addition to the $50,000 
asked for in the bill amending H. R. 13929 and the $17,434 still available from 
the appropriation of $50,000 on February 28, 1920, $165,000 additional will 
have to be appropriated, as the $S2,950 set aside for rental can not be applied 
to the purchase of this tract. 

It is requested that H. R. 13929 as amended be further amended so as to 
include an item of $165,000 to complete the purchase of the 427.8 acres of 
land taken over by the War Department from the Harrisburg Real Estate Co. 
and the 5.43 acres requisitioned from Dr. W. H. Seibert, which amount is 
not covered by H. R. 13929 as amended, or other appropriations, making a 
total available of $232,434.17, or that the item of $165,000 be made the subject 
of separate legislation. 

Summary of funds in connection with this project : 
Funds required : 

For settlement with Harrisburg Real Estate Co $240, 000. 00 

For Rief's extension 21,979.49 

For settlement with Dr. W. H. Seibert 3,000.00 

Total 264, 979. 49 

Funds already appropriated or requested in other bills: 

Appropriated, act of Feb. 28, 1920 50,000.00 

Requested in H. R. 13929 as amended 50, 000. 00 

Total 100, 000. 00 



Balance necessary 164,979. 49 

Appropriation requested 165,000. 00 

A tracing showing the different plots of land is inclosed herewith. 
Cordially, yours, 

Newton D. Baker, 

Secretary of War. 

Col. Williams. There is another letter which is later than that, 
signed by Secretary Weeks. 

Brig. Gen. Carson. Yes; does it change the substance? 

Col. Williams. No; it does not change the substance, but asks 
specific amendments to this bill. 

Mr. Miller. Instead of procuring exclusively a repair station we 
are acquiring another flying field ? 

Brig. Gen. Carson. Yes; in connection with the repair station. 

Mr. Miller. That is an element that will come into it after you 
have the flying field ? 



REAL ESTATE TO COMPLETE ACQUISITION IN CERTAIN CASES. 21 

Col. (iiLLMORE. You know in repair of equipment you have got to 
fly it after you repair it? 

Mr. Miller. That is what I call a pretty good place to have a re- 
pair depot, at the fields where they fly. 

Col. Gillmore. I think if we had started out in the Air Service 
according to your theory and built in one locality or two localities 
our schools, repair depots, and supply depots, we would have been 
wise. 

Mr. Miller. At the flying fields ? 

Col. Gillmore. We did not do that. YVe scattered them from Long 
Island to Florida, Texas, and California, and up into other States 
like Illinois and Ohio. 

Mr. McKenzie. We are hoping for reform. 

Col. Gillmore. We are trying to reform. If we could get into a 
concentrated place ; but here we have over $2,000,000 in the Middle- 
town project, and the Government has $1,325,000 invested alongside 
of it ; I would gamble that the salvage of the ordnance depot build- 
ing will not run $50,000. 

Mr. McKenzie. I can understand why it might be advisable to 
have a storage plant there for the Air Service on account of the 
central location, and I can see where that it might be accepted by the 
House without any particular objection, but to go further than that 
and acquire several hundred acres of land beyond appears to me to 
be at rather an extravagant price, although I have not seen the land 
and know nothing about it. 

Col. Gillmore. I am satisfied it is not. 

Mr. McKenzie. Its location may make it valuable. 

Col. Gillmore. Yes, sir. 

Mr. McKenzie. But with hundreds of millions of acres of lands 
in this country that could have been purchased at from $25 to $100 
an acre, that would have answered the purpose just as well, I am 
inclined to think that some one might raise the point in the House 
that we were wasting money. My question is on the wisdom of 
locating the plant in this particular place. 

Brig. Gen. Carson. A plant of this kind is essentially an indus- 
trial plant, and industrial plants, of course, are located near the 
labor market. You might get land at $25 an acre so far away from 
labor supply that you would have to go to the expense of housing 
the labor. This is near Middletown, where labor and housing are 
available. 

Mr. Miller. What was this tract of land used for preceding the 
Army's advent? 

Col. Williams. This land was being prepared for a State fair 
ground and race track, and these, people had spent $76,000 or more 
on grading on it to establish a race track when the war came along 
and the Government took over a portion of it. It is essentially land 
to be used for industrial purposes. It is on the main line of the 
Pennsylvania. 

Mr. Miller. Was there any other use of it for industrial purposes ? 
• Col. Williams. Not this particular tract. 

Mr. Miller. How much of it was used for this race-track proposi- 
tion? 

Col. Williams. The entire tract. 



22 REAL ESTATE TO COMPLETE ACQUISITION IN CERTAIN CASES. 

Mr. Miller. I understand Col. Gilmore states that there was 
quite a large number of city lots purchased ? 

Col. Williams. That was for the Air Service, east of this, just 
on the edge of Middletown. 

Col. Gillmore. That is all industrial along there. It is full of steel 
mills or plants. You can not tell when you are out of one town into 
another. It is on the main line of the Pennsylvania, following the 
river from Harrisburg down. 

Col. Williams. This is the only undeveloped industrial tract of 
land there. 

Brig. Gen. Carson. I would like to put into the record now this 
letter, signed by Secretary Weeks, to indicate that the present War 
Department administration support the recommendation of its prede- 
cessor. It is a letter addressed to Mr. Kahn, dated May 6. The 
amount of $165,000 was the total amount necessary to complete the 
purchase of the 410 acres of land Ave have been talking about. 
(The letter referred to is as follows :) 

May 6, 1921. 
Hon. Julius Kahn, 

Chairman Committee on Military Affairs, 

House of Representatives. 

My Dear Mr. Kahn: In accordance with your request of April IS, 1921, the 
following report in duplicate is submitted on the inclosed H. R. 204. 

My predecessor, in a communication to you dated February 25, 1021, requested 
that H. R. 13929, as amended by H. R. 16127, be further amended to include an 
item of .$165,000 to complete the purchase of 427.S acres of land taken over 
by the War Department from the Harrisburg Real Estate Co., and 5.43 acres 
requisitioned from Dr. W. II. Seibert, which amount was not covered by H. R. 
13829 as amended or other appropriations. It is recommended that H. R. 204 
be amended to include this item. 

The amendments necessary appear to be as follows : 

On page 2, line 4, insert, after the word " thereof." the following: " Or leases 
made with an option to purchase." 

On page 3, line 6, add the following: ''To complete the purchase, near Middle- 
town, Pa., of 427.8 acres of land taken over from the Harrisburg Real Estate Co. 
and to purchase 5.43 acres requisitioned from Dr. W. H. Seibert, $165,000." 

The items in the accompanying bill carry no appropriations for the payment 
of any awards made by the Court of Claims, as it is understood that all such 
awards are appropriated for by Congress pursuant to the recommendations of 
the committees who pass on such awards. 
Respectfully, 

John W. Weeks, Secretary of War. 

Mr. McKenzie. Instead of having $50,000, shown in the bill, it 
would be $10.-) ,000. 

Maj. Gen. Carson. It is a larger area. The $50,000 covers a small 
area. 

Col. Gillmore. The $50,000 covers 82 acres only. 

Mr. Miller. The $105,000 covers both areas? 

Col. Gillmore. The $105,000 covers the entire area and gives a 
clear title. 

Mr. Miller. It would not be the $165,000 plus the $50,000? 

Col. Williams. Yes. 

Mr. Miller. That is what I am getting at, that we should add to 
the bill $165,000 more. 

Col. Williams. That is right. 

Mr. Greene. Is this lot that is to be added to the $50,000 worth any- 
thing in the peace-time activities unless you have the other that is 
worth $165,000 more? 



REAL ESTATE TO COMPLETE ACQUISITION IX CERTAIN CASES. 23 

Col. Gillmore. No, sir ; if this appropriation is not made what will 
happen is that the Ordnance Department will settle through the 
Court of Claims the rental proposition and will sell the $1,320,000 
of improvements as a salvage proposition. 

Mr. McKenzie. My understanding is that the bill for $50,000 
will take over just these buildings that have been used by the Ord- 
nance Department for storage purposes, and that then they could 
transfer them over to you to be used as a center to keep your repairs 
and stocks and as distributing areas over the entire country adjacent 
thereto. 

Col. Gillmore. They have refused to accept that award, for which 
this $50,000 is carried. 

Mr. McKenzie. The award was $39,000, and the bill carries 
$50,000, which I assume was to take care of any increases. 

Col. Gillmore. The Harrisburg Eeal Estate Co. have stated in 
writing that they would not accept $50,000. Is that correct? 

Col. Williams. That is correct. 

Capt. Calhoun. That is to cover rent on this tract. 

Brig. Gen. Carson. Mr. Baker's letter indicates a certain amount 
already paid on account. 

Col. Williams. I think I can probably explain that. The previ- 
ous bill carried $50,000 to take care of the 31 acres for the Air 
Service. That is 31 acres east of the canal. 

Col. von dem Bussche. Eightjr-nine acres, is it not? 

Brig. Gen. Carson. Thirty one. 

Col. von dem Bussche. The $50,000 added to that is for the 89 
acres requisitioned; not the 31 acres. 

Brig. Gen. Carson. I am speaking of the previous bill which did 
pass Congress; out of that sum $10,000 was paid as representing 
75 per cent of the award, and that leaves in the possession of the 
War Department, after paying certain other items, $17,000 which 
is still available. That is still available to acquire any of this land 
if authorized by Congress. This bill, H. R, 204, ar originally in- 
troduced, carries an item of $50,000 for 82 acres on which the ord- 
nance buildings are erected. If the bill passes, that will be avail- 
able. They will need in addition to the $17,000 left over from the 
other appropriation and in addition to the $50,000 carried in this 
original bill $165,000 which will pay the Harrisburg Real Estate 
Co. the $240,000 less the $10,000 alreadv obtained, and will pay Dr. 
Seibert about $3,000 for his 5 acres, so the $165,000, if added on to 
this bill, will take care of the whole proposition. 

Mr. Miller. Was this Harrisburg Real Estate Co. organized for 
the purpose of acquiring this land and turning it over to this race- 
track proposition ? 

Col. Williams. They spent $76,000 to improve the tract. 

Capt. Calhoun. And they objected very seriously to it being 

taken. ^ • n 

Mr. Greene. Was this Harrisburg Real Estate Co. made up as a 
continuing business institution? Had it a business past, or was it 
an association of citizens interested only in the race-track proposi- 
tion and organized in that way only for that purpose? 

Col. Williams. That is all. . 

Mr. Greene. They are not engaged in the real estate business i 



24 REAL ESTATE TO COMPLETE ACQUISITION IN CERTAIN CASES. 

Col. Williams. Nothing else that I know of. 

Gapt. Calhoun. It was just for this enterprise. 

Mr. Miller. Would the improvements placed on this land by the 
Government destroy it as a race track? 

Col. Williams. Yes, sir. Some of the buildings were erected 
across the race track — across the graded race track. 

Mr. Miller. I can see very clearly the aims of it from this general 
explanation here; but what sticks me is going to buy another flying 
field, with all the attendant expenses it will take to equip that 
flying field, such as officers' quarters and things of that kind, and I 
fear we will have some trouble with it on the floor of the House — to 
buy another flying field. 

The Chairman. We will have a great deal of trouble unless the 
colonel can give us specific assurances. 

Col. Gillmore. What I would like to see the committee do is to try 
to look into the future of the development of this game. We have 
got $3,000,000 approximately of good Government money invested 
there in those buildings and improvements, and there is no question 
but what we are located right as far as the supply and repair game is 
concerned. We have splendid railroad facilities and we have a good 
labor market and Ave are on the only available strip of land around 
there that is suitable for that purpose. Now, I think it would be 
foolish when we can settle this thing for this amount of money to let 
it go and then sometime go and buy perhaps some other site where the 
buildings will cost us practically the same thing. We have buildings 
there now and have that money invested, and it is a development 
proposition, and looking to the future I think that we would save 
probably $1,500,000. 

Mr. McKenzie. In connection with that view, I would say that we 
hope that in future Congress will exercise some discretion in grant- 
ing to the War Department the right or authorize them to buy real 
estate without further investigation of what is going to come of it as 
far as the Military Establishment is concerned. During the war, a 
time when everything was expanded, we were all subject more or less 
to hysteria, and there was a large real estate division in the War 
Department, many of the officers apparently thinking they were 
doing a patriotic duty in going out and purchasing land here and 
there and everywhere, and where they could not purchase it outright 
they placed condemnation proceedings on it. We are simply loaded 
down all over this country with real estate, either absolutely owned 
or the title pending in the courts or under lease, that we have no 
earthly use for. We have been working for years, some of us, trying 
to get a list of them, get a bird's-eye view of it, as you might put it, 
of what we are really confronted with on this matter of real estate. 

Now, we hope, with the aid of the War Department, that in due 
course of time we will eliminate all of these plants that are unneces- 
sary and get rid of the overhead and centralize at the places where 
it would be really to the advantage of the military establishments. 
Now, I would not say that this field is the one we would retain, but 
when we do that you certainly ought to be willing to recommend to 
Congress or the War Department that here are a half dozen other 
fields that we have no use for at the present time and see no prospec- 
tive use for them in the near future; let us get rid of the overhead 



REAL ESTATE TO COMPLETE ACQUISITION IN CERTAIN CASES. 25 

in salaries and concentrate the activities not only of the Air Service, 
but of every other service in the Army. 

Col. Gillmore. We have been doing that. We are getting rid of 
a number of fields and depots. 

Mr. Miller. If you can show to Congress where they can dispose 
of one or two other fields for $1,000,000 or $1,500,000 and buy this 
one for $265,000, then that would be right in line with that same 
fine policy. 

Capt, Calhoun. That is $230,000. 

Brig. Gen. Carson. Did not the letter mention two or three places? 

Mr. Miller. What are they? Put them in the record. 

Col. Gillmore. The Richmond depot at Richmond, Va., which 
cost us about $1,250,000, is on our definite plan to give up in the 
next fiscal year. 

Mr. Miller. What can that be salvaged for? 

Col. Gillmore. It is a very good construction. I do not know. 

Mr. Miller. Give an estimate. 

Col. von dem Bussche. I have had several inquiries to purchase 
that plant for approximately $1,000,000 suggested as a purchase 
price by a corporation down there. The property has a very fine 
salable value. 

Mr. Miller. That could be disposed of? 

Col. von dem Bussche. Yes. 

Mr. Miller. What is the next one? 

Col. Gillmore. The next one is Morrison, Va. ; 48 large warehouses 
there. It is a lease proposition. 

Mr. Miller. Are the 48 warehouses of brick construction? 

Col. Gillmore. No, sir; wooden construction, but very good con- 
struction. 

Mr. Miller. Could that be salvaged to advantage? 

Col. Gillmore. There is a railroad spur track alongside each ware- 
house. It comes in along the main line and there is a spur to the 
warehouses which were built at an angle. 

Mr. Miller. Could that be salvaged at an advantage to the Gov- 
ernment ? 

Col. Gillmore. Not later than last week there was a gentleman 
from Norfolk who said he represented a good deal of capital and 
that they were anxious to get that property, and said they were in 
position to offer very good prices. 

Mr. Miller. Did lie make any suggestion as to the amount ? 

Col. Gillmore. No, sir. 

Mr. Miller. What would be reasonable in the range of value 
you could probably get ? 

Col. Gillmore. I think we ought to get between $200,000 and 
$300,000 for it. 

Mr. Miller. That can be given up and that money come in ? 

Col. Gillmore. That is on our program. 

Mr. Miller. What is the third one ? 

Col. Gillmore. The Little Rock Depot, Ark. The reason we are 
not planning on that this next year is because the motors are con- 
centrated there. I think you visited it. 

Mr. Miller. I was not there, but I heard about it. 

Col. Gillmore. We have thousands of Liberty motors, Lerhones, 
Hispanos, and O. X. 5's. It is cheaper to keep the depot than it is 



26 REAL ESTATE TO COMPLETE ACQUISITION IN CERTAIN CASES. 

to move the motors right now, but as those motors are going out into 
use that depot can be given up. That depot is of very good construc- 
tion and in an industrial section at Little Rock and will bring a 
good price as an industrial plant. It has about the same character 
of construction as the Richmond one. 

Mr. Miller. It might turn out to be cheaper to retain this and dis- 
tribute the motors to other places? 

Col. Gillmore. It is one we are going to give up. 

Mr. Greene. All this gets down to this analysis: You are selling 
something you do not want and propose to put that money into some- 
thing you do not need, and therefore you have got it for nothing. 
That is what the question will be if you do not decide on the utility 
for this particular site here as compared with your present policy. 
It is all right to say you can sell something you do not want that is 
being kept up at an overhead expense for a certain price, but there 
is no economic gain in dumping that money into something else that 
may not be wanted either. 

Col. Gillmore. I can not imagine of our not wanting a repair and 
supply depot in this section of the country. The whole area we have 
to supply is so great, railroad facilities so good, and the strategical 
location so excellent that I can not imagine doing anything but 
locating there. 

Mr. Greene. The question you have to balance to get the indorse- 
ment of Congress is not simply a military one. You and I know 
that from years of experience here. 

Col. Gillmore. Yes, sir. 

Mr. Greene. Sitting around this table and trying to appropriate 
for a military program because it was approved as a military pro- 
gram and that was the end of it, we could easily get up a system of 
activities that might include this. 

Capt. Calhoun. That has already been clone by the staff, and this 
is one of the strategical points they have selected. 

Mr. Greene. I am getting at the approval of that and bringing 
the money out of the Treasury for it. We have to take into reckon- 
ing the economic value, but none the less we respect the figures of the 
military plan. You would have to show why this kind of a policy 
of establishing centralized repair shops, and so on, is more economical 
tli an the distribution in local flying fields. 

Co]. ( riLLMORE. I will be very glad to give you the figures. 

Mr. Greene. It is very desirable that somewhere you put the figures 
into the record. 

Brig. Gen. Carson. Would it not be well to summarize for the gen- 
tlemen of the subcommittee the fact that there are really two propo- 
sitions involved here; in the first place, the Air Service has a field 
and the Government owns some of the land on which it is located. 
In the second place, the Ordnance Department does not want the 
depot there, and the Air Service desires to get it to add to what they 
have now. 

Mr. Greene. Here is another thing w T e ought to know on what 
might grow out of a situation like that. Uncle Sam has a title in 
fee to land acquired through stress of war or something of that kind, 
and he has now an asset worth so much, but if there is no economic 
use for it, its yearly upkeep and maintenance indicate that he would 
have been better off to have even given it up rather than to keep it. 



REAL ESTATE TO COMPLETE ACQUISITION IX CERTAIN CASES. 27 

Brig. Gen. Carson. This proposition involves the abandoning of 
a large plant at Richmond, Va., which, as Col. von dem Bnssche 
states, is one asset. 

Mr. Greene. I say, again, that I do not accept that idea of getting 
a certain market price so to show a gain. We are only getting back 
part of what we had to pay during the war and there is no economic 
gam about it. The question is whether or not that money might not 
be better covered into the Treasury than expended as if it was a busi- 
ness proposition in any activity of a similar kind to-day which you 
have just released. 

Col. Gillmore. I think in that argument, Mr. Greene, you lost 
sight of the fact that there is $1,325,000 worth of Government im- 
provements on this 82 acres of land now. 

Mr. Greene. I was just speaking to the General about that. It is 
very conceivable that in any man's business experience he has ac- 
quired something which is no longer useful, a certain bit of land or 
property which cost so much and is charged off at so much on the 
books, and if you have now to maintain that property it will take but 
a few years to have cost as much as was originally paid for it, and it 
may be better to realize on it right off. The mere possession of any- 
thing is not an asset; sometimes it is a liability. 

Col. Gillmore. That would take us back to the proposition that it 
is not economical to make motor repairs. 

Mr. Greene. Tlurt is what I want you to show. 

Col. Gillmore. As a repair depot. 

Mr. Greene. I want you to show that in such amplification of the 
testimony as the chairman may sanction, because I can see it myself 
as bookkeeping logic ; but it has got to be shown. 

Mr. McKenzie. You may extend your remarks in the record if you 
will get the transcript back to the committee as soon as possible. I 
would like to have it with the report to be filed on the bill so the 
Members of Congress will get some idea of the matter when it is on 
the floor. 

Col. von dem Bussche. This statement will cover that and show 
whether obligated under contract or under requisition, etc. 

Mr. Greene. Is that term ' ; requisition " sufficiently understood so 
that explanation is not necessary 3 

Col. von dem Bussche. The requisition was an emergency power 
given for the obtaining of property. 

The Chairman. Followed by condemnation. 

(Statement submitted by Col. Gillmore:) - 

It is believed that aside from the many other advantages to be gained by 
making this appropriation and authorizing the proposed settlement it might 
result in an actual saving of money to the Government if tins land is pur- 
chased. 

There are two requisition proceedings pending, both started in 1918; one 
covering 31.2 acres now occupied as part of the Air Service depot and one 
covering 82.1 acres occupied by the Ordnance depot. An award of $12,480 was 
made in the first proceeding and of $39,512 in the second proceeding. Both 
awards have been refused by the landowners, but if they should accept the total 
amount to be paid with interest up to June 30, 1921, it would be $63,066.75. 
This includes the award to Dr. Siebert, which with interest, amounts to $2,816.08. 
It is understood that he will accept that, amount. 

The Harrisburg Real Estate Co.. which owns all the rest of the land under 
consideration, has refused to accept the award and they can proceed in the 

I 



28 REAL ESTATE TO COMPLETE ACQUISITION IN CERTAIN CASES. 

United States district court under the provisions of section 10 of the food and 
fuel act, and try out the question as to just how much the award should be. 

From investigation it is believed that awards made might be increased by 
action in court and a jury might award not less than $1,000 per acre for each 
of the two parcels under requisition proceedings. That would be a total of 
113.3 acres for the sum of $113,300. This would be an increase over the award 
actually made by the sum of $61,308. Interest on that sum from August 8, 
1918, the date of the starting of the requisition proceedings, amounts to 
$10,647.15. 

This estimate is for the land actually taken. To it. must be added the amount 
of damage or depreciation in value sustained by the rest of the tract. There 
w r ere 427.8 acres first taken over by the Ordnance Department under lease. 
That comprises the whole piece of land running down to the old canal which is 
the north boundary of the Air Service depot. Taking away 82.1 acres of the 
best part of this tract, which lies nearest, the railroad, reduces the desirability 
of the remaining land as a plot for manufacturing site. It is understood that 
such damages to adjoining land will also be considered in proceedings of that 
nature. The amount of such damage is estimated in this way : 

The Ordnance Department land covered by its lease, amounting to 396.7 acres, 
is given a minimum value of $500 per acre. That is the lowest figure stated by 
any witness on the requisition hearing. The value would be $198,300. Deduct- 
ing therefrom the proceeds of the 82.1 acres taken at $1,000 per acre leaves 
$116,250. This must be further reduced by crediting the value of the remaining 
land at $100 per acre, or $31,450. The item of injury to the land outside the 
82.1-acre piece is thus found to amount to $84,800. Interest on that sum for three 
years ending June 30, 1921, is $15,264,000. 

There is a claim on file in the office of the War Department Claims Board for 
use and occupation of the land at the rate of rent inserted in the original lease, 
which is $3,310 per month. If this claim were sustained, the amount for 36 
months would be $119,260. That would doubtless be greatly reduced, however, 
in case the awards are increased as above estimated and bear interest. But 
the use and occupation of the outlying land, containing 314.5 acres, must be paid 
for. That land has been valued, after the other pieces are taken away, at a 
maximum amount of $100 per acre. A rental of 6 per cent on this valuation 
of 314.5 acres at $100 per acre for three years will produce the sum of 
$5,662.80. These figures make a total of $240,148.70. 

These estimates are based on a physical examination of the property and an 
examination of the testimony adduced at the hearing in the requisition proceed- 
ings, and upon the common experience in such cases, where a local jury is called 
upon to estimate values and damages in cases where land is taken by the 
Government. 

If the proceedings were allowed to be finished as started and pending and 
result in a necessary payment of the amount stated, to wit, $240,148.70, the 
Government will then own two pieces of land, one of 82.1 acres and the other 
31.2 acres, and all claims for damages for use and occupation of the adjoining 
land will be settled. But there will remain installed in the land lying between 
the two parcels a water-main line, which supplies the Air Service depot, and an 
electric power line running across said land. To remove these improvements 
would cost thousands of dollars, and to install other improvements to take their 
place would be a large additional expense. 

The entire matter can be settled by payment of $240,000 and the entire tract 
of 427 acres of land acquired by the Government. This can be accomplished by 
use of the appropriation of $50,000 already in the bill, and by the additional 
$165,000 in the amendment suggested by Secretary of War Weeks in his letter 
of May 6, 1921. 

With further reference to the matter discussed with reference to cost of 
maintaining a central repair depot and maintaining repair depots and the 
qualified mechanical personnel at each flying field for the major repair of motors 
and planes, it is estimated that for the movement of equipment to and from 
repair depots for the entire United States $300,000 per year would cover all the 
transportation charges. Now, as a comparison, we will assume the First Army 
Area, which comprises the First, Second, and Third Corps Areas, would prob- 
ably amount to about $150,000 a year. Should separate repair activities be 
established at the Aberdeen, Boiling, and Langley Fields, it would require at 
least $500,000 a year for the personnel alone, which gives a difference of $350,000 
and which is $50,000 in excess of the transportation for the entire United States. 



REAL ESTATE TO COMPLETE ACQUISITION IN CERTAIN CASES. 29 

In other words, it is estimated that the actual transportation used for this pur- 
pose in the First Army Area does not exceed $75,000 ; that is, by establishing 
separate repair activities at all flying fields for this area and doing away with 
the centralized repair activities, the cost of personnel alone would exceed the 
cost of transportation by approximately $400,000. 

(Thereupon, at 12 o'clock noon, the subcommittee adjourned to meet 
again at 10 o'clock a. m., Tuesday, May 24, 1921.) 



Subcommittee of the 
Committee on Military Affairs, 

House of Representatives, 

Tuesday, May &£, 1921. 
The subcommittee met at 10 o'clock a. m., Hon. John C. Mc- 
Kenzie (chairman) presiding. 

STATEMENTS OF BRIG. GEN. J. M. CARSON, CHIEF CONSTRUCTION 
SERVICE, OFFICE OF THE QUARTERMASTER GENERAL, AND 
MAJ. C. F. VON DEM BUSSCHE. 

Mr. McKenzie. The first item in the bill is for the Army supply 
base, New Orleans, La., $282,000. Major, if you will give us a 
little explanation of that we will be glad to hear it. 

Ma j. von dem Bussche. The project is known as the New Orleans 
Army supply base, located at New Orleans, La. The number of 
acres involved is 39.97, of which 10.72 acres were acquired on Au- 
gust 9, 1918. and there are 29.25 acres yet to be acquired. 

Mr. McKenzie. The 10.72 acres have been bought and paid for? 

Maj. von dem Bussche. Yes, sir. The other, I believe, belonged 
to the Dock Commission of New Orleans. The improvements on 
this property consist of a wharf with a two-story structural steel 
wharf house, 2,000 feet long by 140 feet wide, back of which are 
three 6-story reinforced concrete warehouses, together with ade- 
quate railroad classification and storage yards. The storage space 
covers 2,072.000 square feet gross, and 1,685,000 square feet net. 
The investment in land acquired amounts to $51,800, and the amount 
under contract is $282,000. The improvements amount to $12,500,- 
000, so that the total investment that we will have there will amount 
to $12,833,800. 

Mr. McKenzie. That $282,000 is the amount that the Government 
was obligated to pay prior to July 11, 1919? 

Maj. von dem Bussche. The difficulty was this: In a great many 
of these cases the transactions were not completed because we were 
required by law to have the titles examined by the Attorney Gen- 
ral or the Judge Advocate General, and of course that required 
some time. There was no dispute as to the values, and this was a 
completed contract so far as the United States was concerned. We 
were simply waiting for the papers to come back with reports on 
the titles. 

Mr. McKenzie. This purchase was made from the dock commis- 
sion of New Orleans? 

Maj. von dem Bussche. Yes, sir; they owned the land and it was 
a reasonable price. 



30 REAL ESTATE TO COMPLETE ACQUISITION IN CERTAIN CASES. 

Mr. McKenzie. This particular plant, I assume, will not be of 
any value for military use in peace time, but it is a project that 
probably could be either leased to the city of New Orleans or sold 
to parties who might be interested there? 

Maj. von dem Bussche. I should say that it has a particular mili- 
tary value in that it would be the key port in case we ever operated 
against Mexico. That is my own judgment, and I am not saying 
this from the viewpoint of the War Department. I should think 
that it would be a particularly valuable port plant because of its 
location. 

Mr. McKenzie. Would it be your judgment, or that of Gen. Car- 
son, that it would be well for the Government to keep a string on 
this property? You might lease it, but still retain such jurisdiction 
as would enable you to take it over at any time it became desirable. 

Gen. Carson. Unquestionably; and it is also of potential value as 
a base of supply for Panama. While for a time or during peace- 
time operations we might not require all of it, we would probably 
require some of it for that very purpose, and we could lease the bal- 
ance of the available or surplus space to commercial interests. As 
a matter of fact, that is what we are doing at the present moment. 

Mr. Greene. That suggestion that it could be used as a base of 
supplies for Panama induces me to inquire whether it would be a 
base of supplies for any of our continental garrisons in that region 
at all ? 

Gen. Carson. I do not understand that. Do you mean United 
States garrisons? 

Mr. Greene. Yes. 

Gen. Carson. We have been using it as a base of supplies for 
some of our forces along the Gulf coast, and we are still shipping 
from there to points in Texas. To what extent it will continue to 
be so used is, of course, problematical. 

Mr. Greene. That is probably just because we had it, but if you 
were now to locate a supply base for all our garrisons in the South 
and Southwest you would not put it at New Orleans, would you? 

Gen. Carson. Not necessarily. 

Mr. Greene. The question is whether whatever value there may be 
in this site is a prospective one. or one that we could realize upon 
from day to day now. If we should have an Army base in the 
South to take care of the South generally we would not maintain 
a great base like that at New Orleans just to take care of Panama. 

Gen. Carson. We have nothing else in that region that can take 
care of Panama and that has water connections. The principal 
depot or base or supplies for the forces in Texas is at San Antonio, 
and there is another one at El Paso. The only way by which we 
could get supplies from those places to Panama, except New Orleans, 
would be through Galveston, and we have no activities there at all. 

Mr. Greene. What I am getting at is this : If you were consulting 
the most economical plan, you would not necessarily decide that you 
would have to maintain a water base of supplies, nor any other for 
that matter, limited to the supply of Panama, when you have any 
number of interior bases that would supply a much greater region 
roundabout. 

Gen. Carson. On that basis ; no, sir ; but the base at New Orleans 
has great potential value. 



REAL ESTATE- — TO COMPLETE ACQUISITION IN CERTAIN CASES. 31 

Mr. Greene. That is what I am (jetting at. It has a war value 
rather than an immediate peace value, or it is not an immediate 
peace-time economy. 

(Ten. Carson. We feel that the Government is not expending any 
money unnecessarily upon it, because whatever use we do not re- 
quire of it for our own military purposes is turned over to com- 
mercial interests, so that the Government or the country itself is 
getting a direct benefit from it. 

Mr. Greene. So far as any supplies or operations in the Gulf are 
concerned, that would probably be better controlled from some 
point toward the West Indies side rather than at the mouth of the 
Mississippi — that is. from the practical or strategic standpoint. 

(Ten. Carson. The only other pla< es are on the Atlantic coast, and 
you would have to go to Charleston. Norfolk, or Philadelphia. 

Mr. Greene. The situation that presents itself in this particular 
case is this: If we were going to establish or maintain a base on the 
Gulf coast, the question would be whether it should be at New 
Orleans or somewhere else. If we were now making the first venture 
in that direction, we would not be likely to locate it at New Orleans, 
would we 1 

Gen. Carson. New Orleans is the best location, I think, for such a 
base of operations — that is. with everything considered in the way 
of water facilities, railroad connections, etc. 

Mr. Greene. I am speaking of the military tactical or strategic 
side of it. Your operations are more likely to be active at the en- 
trance to the Gulf than down there in the bowels of it, are they not? 

Gen. Carson. No. sir; I think that under those ciroumstances this 
would be found to be the preferable point. Mobile, Pensacola, and 
Tampa have not as good railroad facilities as they have at New 
Orleans. 

Mr. McKexzie. You could ship supplies from this base around 
through the canal to the Pacific coast, if you were so disposed? 

Gen. Carson. Yes, sir. As a matter of fact, we have been doing 
that very thing. We have been supplying Panama from New York 
and also from New Orleans, but. of course, the difference in sailing 
time is very much in favor of New Orleans. 

Mr .McKexzie. The next item is for the Aimy supply base at 
Brooklyn, N. Y., of $1,590,675.52. Now. major, we will be very 
glad to have you give us some information with regard to that item. 
Those great storehouses were constructed there, I presume, under 
the direction of Gen. Goethals. 

Maj. von dem Bussche. This pioperty is lmown as the Brooklyn 
Army supply base, and it is located at Brooklyn, N. Y. It consists 
of 99.97 acres, all of which was acquired by requisition in April and 
May, 1918. Payment in the amount of $2,334,972.38 has been made 
in full for 42.93 acres. Part payment in the amount of $1,427,860.87 
has been made on 57.04 acres. That part payment is understood to 
mean the payment of the 75 per cent after the award and requisition. 

Mr. Greene. Were those part payments made on separate par- 
cels of land, or were they separate purchases ? 

Maj. von dem Bussche. That was because of separate ownerships. 

Mr. McKenzie. You made contracts of purchase for certain parts 
of it, and other parts you had to condemn or requisition? 

50916—21 3 



32 REAL ESTATE TO COMPLETE ACQUISITION IN CERTAIN CASES. 

Maj. von dem Btjssche. Yes, sir; we had to requisition it. The im- 
provements upon this property consist of two eight-story warehouses 
of concrete construction, three two-story wharf sheds with four 
piers, all of concrete construction, and adequate railroad storage and 
classification yards. The total storage space amounts to 4,681,220 
square feet gross and 3,800,224 square feet net. The land investment 
amounts to $3,762,833.25 paid, and the amount in this bill estimated 
for completion is $1,590,675.52. 

Mr. McKenzie. That is for the completion of the project \ 

Maj. von dem Bussche. Yes. sir; for the completion of the project. 
In other words, the land outlined here in red [indicating] we already 
own. For this part we have paid 75 per cent of the award, and this 
is the amount estimated as necessary to complete it. The total invest- 
ment in this property is $31,353,508.77. The recommendation in this 
case is the same as that in others — that is, that payment for the land 
under requisition be completed in order to protect the Government's 
improvement investment. This land should be acquired in order 
to protect the investment already made. 

Mr. McKenzie. How much of that plant are you using at this time? 

Gen. Carson. The War Department is using the entire plant. The 
warehouses are still practically filled with supplies resulting from 
the war accumulation. It is an active supply base. We are not only 
supplying from this base our depots and the troops in corps areas 
adjacent to it but it is also the base of supplies for our forces in 
Germany. 

Mr. McKenzie. General, do you make use of all these piers, or do 
you lease them ? 

Gen. Carson. I was going to add that we are at the present moment 
leasing one of the piers to a steamship company, the Kerr Co., I 
believe, and the other has been turned over to the Shipping Board 
for its Operations. We are using the third pier for our own Opera- 
tions. 

Mr. McKenzie. What rental do you get from the one leased to 
the Kerr people? 

Gen. Carson. I will correct the figure later, but I think it is in 
the neighborhood of $240,000 a year. ' (Note: $232,029.) 

Mr. McKenzie. Does the Shipping Board pay you anything, or 
do you have any bookkeeping account showing that a certain amount 
of this overhead should be charged to the Shipping Board rather 
than to the Military Establishment? 

Gen. Carson. The agreement with the Shipping Board, if my recol- 
lection is correct, is that it is without compensation to the War De- 
partment. 

Mr. McKenzie. That is fine business for the Shipping Board. 

Mr. Greene. That is why we get this constant cry that it costs so 
much to maintain the Arnry. The other little fellows run after 
leaving their babies on your doorstep. 

Mr. McKenzie. When The Adjutant General of the Army makes 
his report, or when the Secretary of War makes his annual report 
to Congress, it seems to me that it would be a very proper tiling to 
include in that report the amount of rental received for military 
property and turned into the Treasury, emphasizing the fact that 
to that extent, at least, the appropriations for the Military Estab- 



REAL, ESTATE TO COMPLETE ACQUISITION IN CERTAIN CASES. 33 

lishment should be reduced, or rather, that the appropriations for 
the Military Establishment should not be charged with the total 
amount. As Mr. Greene has said, the military establishment is be- 
ing condemned for being a very expensive department, and if we 
can make any showing that would relieve the minds of the people 
on that score. I think it should be made. 

Mr, Greene. They are entitled to it as a matter of common self- 
preservation. 

Gen. Carson. We are preparing such data, and I hope it will be 
given out, as you suggest, in the Secretary's report. 

Mr. McKenzie. Of course, all such property as this particular 
plant is, I would not say garrisoned, but manned by civilian em- 
ployees, and it is, undoubtedly, quite a heavy expense. Right along 
that line, what Mr. Greene and some of the rest of US on this special 
committee are trying to arrive at is some intelligent understanding 
of the amount of property that we have of this kind. We feel, and 
I believe that the Army begins to realize, that it would be, not only 
wise, but an economical thing for the War Department to lease all 
such plants as this wherever it can possibly be done. Where there 
is no real future or prospective use. the property should be sold. 
Where it is leased, you can get a certain amount of rental, and you 
will be relieved of the overhead charge of caring for the property. 
It seems to me that eventually the greater portion of this plant 
or all of the piers might be leased, and the Government could retain 
the right to load or unload at one of them. 

Gen. Carson. I can assure you that that is precisely what we are 
doing now. We are leasing such property at Boston and two piers 
are being leased at New York. Other surplus space at Philadelphia, 
Norfolk, Charleston, and New Orleans is being leased for com- 
mercial use. Eventually when the space in the bio- warehouse is 
not required for Army stores and supplies it will be leased to com- 
mercial interests. 

Mr. McKenzie. Can you tell us offhand about how many . ivilian 
employees you have at this particular place? 

Gen. Carson. At the present moment I can not, but about a year 
ago we had about 6,000. That was not at this particular plant, but at 
the New York general depot, which included the depot on Governors 
Island, Port Newark, and Kearney. How many of them were at 
this depot I can not recall. 

Mr. McKenzie. That meant an enormous expenditure. 

Gen. Carson. Yes, sir. When I took hold of it in the summer of 
1919 we had 12,000. 

Mr. Greene. General, is the fact that this tract is located on an 
island 



Gen. Carson (interposing). Pardon me, it is on the Brooklyn 
shore. 

Mr. Greene. I thought you made some reference to Long Island. 

Gen. Carson. Brooklyn is on Long Island. 

Mr. Greene. That is what I am getting at. It is on an island. 
Does that give it any particular economic advantage over what it 
might have if it were a mainland base? 

Gen. Carson. For all practical purposes; it is a part of the main- 
land, anyhow. 



34 REAL ESTATE — TO COMPLETE ACQUISITION IN" CERTAIN CASES. 

Mr. Greene. I know it is, and I realize that situation and also the 
topographical situation, but what I want to know is this: If we were 
looking at it from the purely economical viewpoint, would it be 
desirable to exchange it for a mainland base, or would we get the 
same economical advantage in having it on an island? 

Gen. Carson. We get an economical advantage, I think, from this 
location, because it is better water. It is a deeper channel and nearer 
the mouth of the bay, and land on the mainland is a great deal more 
expensive than this land. YVe have all the neessary railroad and 
water facilities. This part of Brooklyn is really a part of Xew 
York Harbor, and the railroad connections are such that it is just as 
good as almost any other shipping point on the entire harbor. It 
is better than any in Xew York City proper. 

Mri Greene. Are there any military advantages in that situation 
or is that a secondary consideration? Would you place the supplies 
farther up toward the mouth of the harbor, in view of the possibility 
of hostilities '. 

Gen. ('arson. This is so near the center of the harbor that it is in 
that respect just as good as any one at Hoboken or Xew York proper. 
This point is about 15 miles from Sandy Hook. 

Mr. Greene. So that the question of our friend the enemy trying 
to monkey with it at long range would not present any serious con- 
sideration '. 

Gen. Carson. Xo. sir: it is as safe as Xew York City proper. 

Mr. McKenzie. The next item is for the Armv supply base at 
Charleston. S. C, $159,020. 

Maj. von dem Bussche. That project is known as the Charleston 
Army supply base, located at Charleston, S. C. The total area in- 
volved is 1,533.6 acres. It was requisitioned in April, 1918, and no 
payment on requisition has been made. The improvements consist 
of six warehouses with tile walls and wood floors, two pierhead 
houses of same construction, two open storage areas, and 56 ordnance 
powder magazines, with one ordnance pier shed. The total storage 
space is 1,800,000 square feet gross, and 1,620,000 square feet net. 
The improvements amount to $16,500,000 and the total investment is 
$17,100,000. The recommendation in this case is that payment for the 
land be made and the acquisition thereby completed in order to pro- 
tect the Government's improvement investment. 

Mr. McKenzie. This is about 11 miles up the river from Charles- 
ton? 

Maj. von dem Bussche. I am not quite familiar with it. I have 
never been there, and I am not familiar with the exact location. 

Mr. McKenzie. The question of its military use will be determined 
later? 

Maj. von dem Bussche. Yes. sir. 

Mr. Miller. How does the title to the land lie now? Is it requisi- 
tioned property '. 

Maj. von dem Bussche. Yes, sir. 

Mr. Mtller. Nothing has been paid for it? 

Maj. von dem Bttssctte. No, sir. Under the interpretation that has 
been made of the law on the subject of requisitions, the fee vests in 
the United States at the date of the service. 

Mr. Miller. The possession and all that? 



REAL, ESTATE TO COMPLETE ACQUISITION IX CERTAIN CASES. 35 

Maj. von dem Bussche. Yes, sir; possession and all that goes at 
that date. 

Mr. Miller. The Government has strong-armed the man out of 
his property, and has paid nothing for it? 

Maj. von dem Bussoh. The War Department board of appraisers 
fixed the amount of the award, which is the figure included in the 
bill. 

Mr McKenzie. Are the owners satisfied with the award! 1 

Maj. vox dem Bussche. No, sir. 

Mr. McKenzie. They are claiming more? 

Maj. vox dem Bussche. Yes, sir; they are claiming- more. 

Mr. McKenzie. The next item is for the Army supply base at 
Norfolk. Va., $190,000. 

Maj. von dem Bussche. This project is known as the Xorfolk 
Army Supply Base, located at Xorfolk, Ya. It has an area of 913.4 
acres, of which 782.83 acres were acquired in March, 1918, and ap- 
proximately 35 acres were acquired in May and June, 1919. There 
are 95.97 acres not yet acquired. The improvements consist of two 
reinforced concrete piers with one and two story pier sheds, re- 
spectively, eight 1-story warehouses, railroad storage and classifi- 
cation yard, having a total of 43.9 miles of track, together with water 
mains, reservoir, sewer, and electrical system, and appurtenances 
thereto. The storage space amounts to 2,765,300 square feet gross. 
or 2,451,305 square feet net. The total land investment amounts to 
$2,293, 174.91 for land acquired and $230,235 estimated as necessary 
to complete the acquisition of the land, making a total land invest- 
ment of $2,523,409.91. The total improvements are valued at $26,- 
675,000, and that, with the land already acquired, represents a total 
investment of $29,158,174.91. The recommendation is that the ac- 
quisition of the land be completed in order to protect the Govern- 
ment's improvement investment. 

Mr. McKexzie. Is the land in question, and for which you are ask- 
ing this appropriation to complete the purchase price, that part 
of the land on which buildings are located or is it vacant? 

Maj. von dem Bussche. Xo, sir. This land is in here [indicating], 
where the tracks are. Here [indicating] is the track approach to 
this piece here. This piece of property here [indicating] has been 
turned over to the Public Health Service or the War Risk Insurance 
Bureau, and they have here a base hospital. What we have yet to 
acquire is this portion in here [indicating] indicated by the yellow 
lines. This indicated by brown lines is property to which we already 
have the fee-simple title. 

Mr. McKenzie. How much railroad track is included here? 

Maj. von dem Bussche. There are 43.9 miles of railroad track in 
the classification yard and approaches. 

Mr. McKenzie. Will you have to maintain all of those tracks, or 
will there be a chance to lease them to a railroad company ? 

Maj. von dem Bussche. So far as I know T the trackage is essen- 
tial. 

Mr. McKenzie. Where is the main line of railroad ? 

Maj. von dem Bussche. So far as I know the trackage is essen- 
tial to the post itself. The main line is out here [indicating]. 

Gen. Carson. Whether we use this or lease it, this should go with 
it as a part of the unit. 



3f> REAL ESTATE TO COMPLETE ACQUISITION IN CERTAIN CASES. 

Maj. von dem Bussche. The part shown in green has been turned 
over to the Public Health Service. 

Mr. McKenzie. This is built right on the water front? 

Maj. von dem Bussche. Yes, sir. 

Mr. McKenzie. You have two piers? 

Maj. von dem Bussche. Yes, sir. 

Mr. Miller. Are we paying here for some property that has been 
heretofore turned over to the Public Health Service ? 

Maj. von dem Bussche. Yes, sir. This goosehead piece was a part 
of the requisitioned property, and that, together with this other area 
[indicating] has been turned over to the Public Health Service. 

Mr. Miller. The property to be acquired under this provision of 
the bill has heretofore been turned over to the Public Health Service? 

Maj. von dem Bussche. No, sir; this piece here [indicating] is yet 
to be acquired. 

Mr. Miller. Can you state approximately what proportion of it 
was turned over and what proportion will be retained by the Army? 
I want to know what proportion of it has been heretofore turned over 
to the Public Health Service. 

Maj. von dem Bussche. About 50 per cent of it was to be retained 
and 50 per cent has been turned over. 

Mr. Miller. This property has been requisitioned? 

Maj. von dem Bussche. Yes, sir; that is the part [indicating] yet 
to be acquired by requisition. The other was settled for by pur- 
chase. 

Mr. Miller. Referring to the owners of this property, are they 
satisfied or dissatisfied? 

Maj. von dem Bussche. They have not accepted the award. 

Gen. Carson. We think we will be able to make an adjustment 
with them. 

Maj. von dem Bussche. I am quite confident we will be able to 
adjust this with them. 

Mr. McKenzie. The next item is for the Army repair depot at 
New Cumberland, Pa., $92,500. 

Maj. von dem Bussche. This project is known as the interior 
quartermaster storage depot, located at New Cumberland, York 
County, Pa. Its area is 941.5 acres, of which 403 acres were acquired 
in May, 1918. Five hundred and thirty-eight and five-tenths acres 
of the tract were requisitioned in May, 1918, but has not yet been 
paid for. The improvements consist of eight fireproof warehouses, 
two open sheds, a railroad and classification yard, barracks and quar- 
ters, and water supply mains. The storage space amounts to 1,940,000 
square feet. The total investment, including the land alreadv paid 
for, amounts to $4,448,400. 

Mr. McKenzie. Have the owners of this property which has been 
requisitioned accepted the 75 per cent? 

Maj. von dem Bussche. No sir. 

Mr. McKenzie. And $92,500 represents the full value of it? 

Maj. von dem Bussche. Yes, sir; that represents the full value of 
it. Four hundred and three acres of it were purchased at a cost of 
$63,400, and there are 538.5 acres yet to be acquired. This shown in 
brown [indicating] is what we own. 

Mr. McKenzie. Will you explain a little more in detail where this 
land is located, or whether it is on a river or bay ? 



REAL ESTATE TO COMPLETE ACQUISITION IN CERTAIN CASES. 37 

Maj. vox dem Bussche. It is on the Susquehanna River. 
Gen. Carsox. It is not far from Harrisburg. 

Mr. Miller. How far is it from that tract we were considering 
yesterday in connection with the race-track proposition? 
Maj, vox dem Bussche. I do not know. 
Gen. Carsox. I will put the exact mileage in the record. 

Note. — Twelve miles. 

Mr. McKexzie. How far is it from Harrisburg? 

Maj. vox dem Bussche. I do not know. 

Note. — Three miles. 

Mr. James. What is the value of the improvements upon the land 
that Ave have not vet paid for? 

Maj. von dem Bussche. I think that a majority of the improve- 
ments are on the tracts not yet paid for. These big storehouses 
[indicating] are partially on Government-owned property and par- 
tially on property not yet Government owned. 

Mr. McKexzie. What is the character of the land! 1 

Maj. vox dem Bussche. I do not know: but, apparently, it is not 
particularly good land. I am assuming that from the fact that 400 
acres were acquired at a cost of $63)000. I imagine that it is not the 
most valuable land in that section of the country. 

Mr. McKexzte. There would be but little chance to lease this 
property for commercial uses? 

Gen. Carsox. There is no intention of doing that. This is needed 
as a reserve depot, but, of course, if in the future any space should 
become surplus, it could be leased. 

Mr. James. Do you require all of that space at the present time? 

Gen. Carsox. Yes, sir. 

Mr. McKexzie. What department has charge of it — the Quarter- 
master General's department? 

Gen. Carsox. Yes, sir; it is a reserve depot of the Quartermaster 
Corps. 

Mr. McKexzie. You keep all kinds of Quartermaster supplies 
there, I presume? 

Gen. Carsox. Yes, sir; and I think supplies pertaining to some of 
the other departments known as general supplies. I am not positive 
about that, but I think that all classes of reserve supplies are sent 
there. 

Mr. McKenzie. The next item is for the Army Reserve Depot at 
Schenectady, N. Y., $3,000. 

Maj. von dem Bussche. This project is known as the Interior 
Quartermaster Storage Depot, located at Schenectady, N. Y. It has 
an area of 231.36 acres, of which 220 acres were acquired in May, 
1918, and there are 93 lots yet to be acquired. The improvements 
consist of 8 closed warehouses, 2 open sheds, and 42 small canton- 
ment buildings. The total storage space amounts to 2,060,000 square 
feet closed, and 537,600 square feet open. The investment on account 
of the land already acquired is $88,646.80, and the value of the im- 
provements is $4,680,000, making a total investment of $4,768,646.80. 
The recommendation is that the title to the land now 7 under contract 
be acquired in order to protect the Government's improvement and 
investment. 



38 REAL ESTATE— TO COMPLETE ACQUISITION IN CERTAIN CASE-. 

Mr. McKenzie. Why is it essential to have those few lots? 

Maj. von dem Bussche. Because the improvements are all over 
them. Here [indicating] are the outside areas, and these are little 
pieces of property on the inside. These belong to small property 
owners on the inside. We own the land out to the line there [in- 
dicating], and this represents the total area. 

Mr. Miller. This little portion | indicating] is not yet paid for? 

Maj. von dem Bussche, That is true. 

Mr. Miller. How about the landowners there? Are they willing 
to take the award? 

Maj. von dem Bussche. That is purely a question of negotiations. 
It is a case where the title was bad, and we did not have time to clear 
it up before the prohibition went into effect. 

Mr. McKenzie, The next item is for the quartermaster depot at 
Jeffersonville, Ind., $225,000. 

Maj. von dem Bussche. This project is known as the quartermaster 
depot located at Jeffersonville, Ind. It has a total area ot 261.6 acres, 
of which 17.4 acres were acquired in 1870, and there are yet to be ac- 
quired 235.62 acres, bringing the total area up to 261.6 acres. This is 
one of the old establishments which was simply enlarged. 

Mr. McKenzie. When was this requisition made? 

Maj. von dem Bussche. I do not think it has ever been requisi- 
tioned. It was under lease, and then they erected these warehouses. 
They are not trying to buy it. It is held under lease partially, and 
I do not think it was ever requisitioned. 

Mr. McKenzie. The only thing that, perhaps, makes it necessary 
to purchase this particular tract at Jeffersonville is because of the 
transfer of a part of the activities from the Rock Island Arsenal to 
Jeffersonville. I presume you remember the discussion that came up 
in the House in regard to that? 

Mr. Miller. Yes ; the Rock Island Arsenal was gutted and a part 
of it sent down here. 

Mr. McKenzie. Certain activities were transferred from Xew 
York to Rock Island. 

Gen. Carson. That is one of the big manufacturing depots. 

Maj. von dem Bussche. The improvements consist of various ware- 
houses of the following classes of construction: Steel : frame, covered 
with sheet iron ; wood frame, covered with sheet iron ; brick and con- 
crete ; frame, together with the necessary railroad spur tracks, etc. 
The total storage space amounts to 3,852.165 square feet. I have not 
been able to locate the papers in this case, but it appears that the total 
investment in improvements is $2,732,000. The recommendation in 
this case is that payment for the land be made in order to protect the 
Government's improvement investment. It is necessary to protect 
the investment in those warehouses that have been erected on the 
leased property. 

Mr. Miller. The warehouses were erected on the property that you 
want to acquire now ? 

Maj. von dem Bussche. Yes, sir; and that is the reason we want to 
acquire it. We want to acquire it because of the permanent improve- 
ments that have been erected on it. 

Mr. Miller. What proportion of the warehouses are on that prop- 
erty? 



REAL ESTATE TO COMPLETE ACQUISITION IN CERTAIN CASES. 39 

Maj. vox dem Bttssche. A majority of them. All of this shown in 
yellow represents new construction, and this shown in red is what 
we own. 

Gen. Carson. A great deal of space is needed here for storage pur- 
poses. We have animal-drawn vehicles stored there and also harness. 

Mr. McKenzie. We will pass the next item for the quartermaster 
warehouse at Baltimore, Mid., until to-morrow. We will take up 
the item for quartermaster warehouses at Newport News. Va.. 
$223,670. 

Maj. vox dem BussCHE This project is known as the quarter- 
master warehouses located at Newport News. Ya. The total area 
consists of 41.85 acres, which was occupied by a lease in li>17. or in 
the early part of 1918, at a rental of $3,588.48 per annum. The 
improvements eonsist of a group of semipermanent warehouses, with 
concrete floors, frame superstructure, and brick fire walls, together 
with railroad trackage, concrete roadways, water supply, etc. Noth- 
ing has been paid for the land. The total storage space amounts to 
4i J <).()()() square feet under cover. The value of the improvements is 
$1,995,000, and the total investment would he $2,218,670. The recom- 
mendation is that the land he acquired in order to protect the Gov- 
ernment's improvement investment. 

Mr. M< Kexzie. Are these warehouses being utilized by the War 
Department ? 

Maj. yonjcem Btjssche. No. sir; they are empty. It is simply a 
question of protecting the investment there. 

Mr. McKexzie Is there any prospect of selling them \ 

Gen. Carson. That is what we are endeavoring to negotiate with 
the owners of the land at the present moment, hut it has not yet 
come to a definite conclusion. If we were to dispose of those various 
improvements, or the warehouse group, which cost us originally 
nearly $2,000,000, the salvage value would not he 5 per cent. If Ave 
owned the land, of course, we would have a complete commercial 
unit that we could either lease or sell; hut if we can not acquire the 
land, then we must make the best bargain we can with the owners 
of the land. In our opinion, these warehouses have a good potential 
value. Warehouse space in that harbor is in great demand, so we 
are told, and this property could be put to commercial uses. We 
are endeavoring to come to a satisfactory agreement with the owners 
to either purchase these improvements at a fair valuation, or, if we 
can not agree upon such a figure, to lease them from the Government, 
and we would continue to lease the land. 

Mr. McKenzie. It is a business proposition ? 

Gen. Carson. Yes, sir. We have vacated these two groups [indi- 
cating] and do not use them any more. 

Maj. vox dem Btjssche. I might say in that connection that the 
landowners have the War Department practically at their mercy. 
The foundations and floors in those warehouses are concrete, and we 
are obligated to restore the land. Therefore, if we have to comply 
with the terms of the lease it will cost us, in addition to the invest- 
ment already put in the property, considerably more to take out the 
concrete piers and floors in the warehouses, whereas if we owned the 
property we could sell it at a figure more nearly equal to its value. 
The salvage value of the buildings is said to be in the neighborhood 
of $250,000, and the improvements cost $1,995,000. 



40 REAL ESTATE TO COMPLETE ACQUISITION IN CERTAIN CASES. 

Mr. McKenzie. The next item is for the Artillery range at Toby- 
hanna, Pa., $7,533.67. My recollection is that there was a very good 
argument made in favor of that, but, for the benefit of this record, 
you may make a statement in connection with it. 

Maj. von dem Bussche. This project is known as the National 
Guard artillery range, located at Tobyhanna, Pa. The total area 
consists of 21,125 acres, of which 18,91:2 acres were acquired during 
the period from. January, 1914, to July, 1918, and there are 2,183 
acres not yet acquired. Data as to the improvements on the property 
are not available, but they must be very small, consisting of target 
butts and some small storage buildings. It is not a storage project. 
The approximate cost of the land already acquired was $56,000 and 
the cost of the land to be acquired is $7,533.77. 

Mr. McKenzie. Just why do they want this additional tract ? 

Maj. von dem Bussche. It is in order to provide access to the full 
use of the land already acquired. 

Mr. McKenzie. Have you a map of that area ? 

Maj. von dem Bussche. Yes, sir. The Government's property is 
indicated in yellow and orange. This [indicating] is the property 
that we own, and the property that is desired is shown in blue. I 
presume this is to give access to the property here. 

Mr. Miller. What is this detached piece out here [indicating] 
for? 

Maj. von dem Bussche. I do not know. It might be well to have 
a representative from the Militia Bureau to make a statement in 
regard to that. 

Mr. McKenzie. You may put a little more detailed statement in 
the record showing why these little tracts are desired. 

Maj. von dem Bussche. I will do so. These tracts are necessary 
to complete the project from the standpoint of safety, access to the 
remainder of the property, and similar purposes. 

Mr. McKenzie. The next item is for general hospital No. 19, at 
Azlea, N. C, $58,000. 

Maj. von dem Bussche. This project is known as General Hospital 
No. 19, located at Azalea, X. C. The area consists of 375.63 acres, 
of which 289.24 acres were requisitioned March 6, 1919, and 86.39 
acres are under contract dated June 25, 1919. The buildings are of 
the usual hospital type, with a capacity for 1.300 beds. The total 
cost of the land is estimated to be $57,448.86, while the improve- 
ments cost $2,668,609. The purpose there is purely one of protect- 
ing the investment that the Government has made. 

Mr. McKenzie. The Public Health Service is now making use 
of it? 

Maj. von dem Bussche. Yes, sir. 

Mr. McKenzie. The only interest that the War Department has 
in it is to perfect its title in order that it may be legally transferred 
to the Public Health Service? 

Maj. von dem Bussche. Yes, sir. 

Mr. McKenzie. And, of course, to make settlement with those citi- 
zens with whom they have entered into contracts, as w y ell as to make 
settlements where condemnation proceedings have been instituted? 

Maj. von dem Bussche. Yes, sir. A part of it is under requisi- 
tion and a part of it is under contract. It was turned over to the 
Public Health Service on October 29, 1920. 



REAL, ESTATE- — TO COMPLETE ACQUISITION IN CERTAIN CASES. 41 

Mr. McKenzie. The next item is for site for septic tank. Souther 
Field. Americus, Ga., $750. 

Maj. vox dem Bussche. That is a part of the Souther Flying 
Field controlled tw the Air Service, located at Americus Ga. The 
acreage required is 4.6. Souther Field proper consists of 406.68 acres, 
which was acquired July 5. 1919, at a cost of $32,534.40. The im- 
provements on this little piece of land consist of the septic tanks for 
Souther Field, and $750 is the amount estimated as necessary to 
acquire the land. 

Mr. McKexzie. The septic tanks have been constructed on the 
land? 

Maj. vox dem Bussche. Yes, sir. The total cost of the improve- 
ment is $30,000, or that is the cost of the tanks proper. The total value 
of the improvements at Souther Field is not available to us. 

Mr. McKenzie. The next item is for the Ordnance depot at 
Savanna, 111., $500. 

Maj. von dem Bussche. This project is known as the Savanna Prov- 
ing Ground, located at Savanna, 111. The area consists of 13,172 
acres acquired from July, 1917, to May. 101S. and there are 0.387 acre 
to be acquired for site and access of observation tower and a part of 
the proving facilities. 

Mr. McKenzie. We will now take up the item for the Ordnance 
depot at Pedricktown, X. J., $215,652.90. We will be glad to hear 
anything you have to say in regard to this item. Mr. Patterson. 

STATEMENT OF HON. FRANCIS F. PATTERSON, Jr., A REPRESENTA- 
TIVE IN CONGRESS FROM THE STATE OF NEW JERSEY. 

Mr. Patterson. Mr. Chairman, I simply want to urge the com- 
mittee to retain that. item in the bill. It is a perfectly proper item 
and a very necessary item. During the war the Government went to 
Pedricktown, N. J., and seized about 22 farms for the Ordnance De- 
partment. Those farms were taken over for the use of the Ordnance 
Department, and the farmers were ousted from their property. 
Pedricktown grew from a place of 2,500 people to 25,000 people, and 
they could not get accommodations. They had no money to get other 
farms with, and they have never had a penny from the Government 
on account of the taking of their property. Quite a number of suits 
have been instituted in that connection, and judgment has been re- 
covered. One judgment in particular was that in favor of James 
McCrann for $17,272 for real estate and $200 for damage to crops. 
That judgment was obtained in the United States District Court and 
was appealed to the United States Circuit Court of Appeals, where 
the judgment was affirmed, showing that the claims are perfectly 
proper. These people have been waiting for three years for their 
money, and they have not received a penny. They are really in 
distress. 

Mr. McKenzie. While I do not approve of that method of doing 
business and whether Congress is to blame or the War Department is 
to blame 

Mr. Patterson (interposing). I do not think that anybody is to 
blame, or I do not blame anybody. I only ask for speedy action in 
getting the money to these people who are entitled to it. 



42 REAL ESTATE TO COMPLETE ACQUISITION IN CERTAIN CASES. 

Mr. McKenzie. As a matter of fact, this apparent outrage is possi- 
bly going to work to the good of those particular friends of yours, in- 
asmuch as the money that they will receive will buy at least one-third 
more now than if they had invested it at that time. 

Mr. Patterson. That is probably true. 

Mr. McKenzie. Therefore, perhaps they may not be damaged so 
greatly by having to wait this length of time to get their money. 

Mr. Patterson. I do not think that it was an outrage to take the 
property, because the Government probably needed it. My only com- 
plaint is that these people are in distress because they are deprived 
of the use of their money. I want to urge the committee to retain 
this item in the bill and get it through as speedily as posisble for the 
benefit of these people. 

Mr. McKenzie. I wish to say to you that it is the purpose of this 
committee to get this bill up within a few days, if possible. 

Mr. Patterson. I will not detain you any longer, and I thank you 
for your courtesy. 

Maj. von dem Bussche. This project is known as the Delaware 
Ordnan< e reserve depot, located at Pedricktown, Salem County, X. J. 
It contains 1,540.14 acres and it was requistioned in October, 1918, 
but not paid for. The improvements consist of a permanent storage 
establishment, storage buildings, docks, locomotive house, utilities, 
buildings of permanent construction and housing of temporary con- 
struction. The items of construction are as follows: Thirty-two 
ammunition magazines, 346,080 square feet: 53 smokeless-powder 
magazines, 150,573 square feet: 8 primer and fuse magazines. 2'2.7'2S 
square feet; 8 general warehouses of temporary type, containing 
17,063 square feet, or a total area of 536,444 square feet. The im- 
provements are valued at approximately $3,487,273. 

Mr. McKenzie. This property was requisitioned \ 

Maj. von dem Bussche. Yes. sir. 

Mr. McKenzie. The valuation upon which you base this estimate 
in the bill is taken from the appraised values? 

Maj. von dem Bussche. It is taken from the appraisals, or that is 
the amount of the award made by the board of appraisers. 

Mr. McKenzie. Has the 75 per cent been paid in this case? 

Maj. von dem Bussche. No. sir. Whether the landowners have 
refused to accept it, or whether the prohibition was effective before 
we had an opportunity to pay them the 75 per cent, I do not know. 
If it was subsequent to July 11, 1919, we were prohibited from pay- 
ing the 75 per cent. 

Mr. Greene. Is this regarded by the ordnance people as necessary 
in their peace-time administration? 

Maj. von dem Bussche. That is a question I can not answer. 

Mr. Greene. That is a question of policy. 

Maj. von dem Bussche. Yes, sir. The recommendation in this 
case is that the title to the land now under contract be acquired in 
order to protect the Government's improvements and investment. 

Mr. McKenzie. The next item is for sewer right of way for hous- 
ing project, Bethlehem, Pa., $275. 

Maj. von dem Bussche. That is part of the project of the Bethle- 
hem Steel Corporation. It is necessary to acquire a right of way for 



REAL, ESTATE TO COMPLETE ACQUISITION IN CERTAIN CASES. 43 

a sewer, and the ground was acquired in May, 1918. This is a claim 
for damage for sewer right of way in connection with housing facili- 
ties on ordnance contract with the Bethlehem Steel Co. The contract 
has been closed and the housing facilities disposed of, but the award 
in condemnation for damages sustained remains. The recommenda- 
tion is that the title to the land now under contract be acquired in 
order to protect the Government's improvement investment. 

Mr. McKexzie. That $275 represents a judgment '. 

Maj. von hem Bussche Yes, sir; a judgment. 

Mr. McKexzie. The next item is for the Aberdeen Proving 
Ground, Md., $174,591.63. 

Maj. vox dem Bussche. This project is known as the Aberdeen 
Proving Ground, located in Baltimore and Harford County, Md. 
The area consists of approximately 35,000 acres. The acquisition 
began in October. 1917, and has not yet been completed. Approxi- 
mately 100 acres have not as yet been paid for. The improvements 
consist of barracks, officers'' quarters, administration buildings, 
offices, warehouses, proving grounds, I tombing fields, etc. The in- 
vestment amounts to $7,000,000 appropriated by the act approved 
October 6, 1917. The appropriation was increased to $8,480,000 by 
act approved July 8, L918. From the foregoing appropriations 
$3,563,503.20 has been allotted for procurement of land and payment 
of damages in connection therewith. Of these allotments. $74,591.63 
remains unexpended. In addition to this unexpended balance, it 
would require approximately $100,000 to complete the purchase of 
land and pay land damage claims. It is understood that practically 
all of the balance of the appropriation has been expended for build- 
ings and improvements. 

Mr. Miuler. What damage claims come within that category? 

Maj. vox dem Bussche. Crop damages, damages to fences, etc. 

Mr. McKexzie. That would not be a proper charge to be carried in 
a bill of this character, would it \ 

Maj. vox OEM Bussche I think it would: yes. sir. We are under 
obligation to complete the purchase of that property. 

Mr. McKexzie. This is for crop damages on land that you pur- 
chased '. 

Maj. vox dem Bussche. Yes. sir: and in addition to the $100,000 
we also need to have made available the $74.591. 63 left, which, of 
course, was no longer available after the passage of the act of July 11, 
1919. 

Mr. McKexzie. How much of this $174,591.63 is for the payment 
of the purchase price of land and how much for damages \ 

Maj. vox dem Bussche. I can not say. That is the amount esti- 
mated as necessary to complete everything, the purchase price and 
the damages. 

Mr. McKexzie. Could you put in the record a little more detailed 
information in regard to that ? 

Maj. vox dem Bussche. I will do so. About $91,000 for damage 
claims ; remainder for purchase and title examination. 

(Thereupon the subcommittee adjourned until to-morrow, Wed- 
nesday, May 25, 1921, at 10 o'clock a. m.) 



44 REAL ESTATE TO COMPLETE ACQUISITION IjST CERTAIN CASES. 

Subcommittee or the 
Committee on Military Affairs. 

House of Kepresentatives, 

Wednesday, May 25, 1921. 
The subcommittee met at 10 o'clock a. m., Hon. John C. McKenzie 
(chairman) presiding. 

STATEMENTS OF HON. CHARLES E. FULLER, A REPRESENTATIVE 
IN CONGRESS FROM THE STATE OF ILLINOIS; BRIG. GEN. J. M. 
CARSON, CHIEF OF CONSTRUCTION SERVICE, OFFICE OF THE 
QUARTERMASTER GENERAL; AND MAT. C. F. VON DEM BUSSCHE. 

Mr. McKenzie. As I understand it. Mr. Fuller, you desire to have 
this bill, H. E. 0311, incorporated as an amendment to the bill that we 
are now considering ' 

Mr. Fuller. I will be very glad, Mr. Chairman, to have that done. 
This is H. K. 6311, authorizing the Secretary of War to dismiss con- 
demnation proceedings and to negotiate new leases for or to purchase 
certain tracts of land at Camp Grant, Winnebago County. 111. The 
owners of the land in question have sent in a petition, as follows : 

The undersigned are owners oi' a total of 588 acres which are now being used 
under lease by the Government as a part of Camp Grant. 

The lands are known as the J. August Johnson land, Baldwin land, and Sam- 
uelson land, which are referred to in detail later. 

Your petitioners represent that the Government is attempting to condemn the 
fee to said land, and have ottered to pay the owners a sum of money which the 
owners believe in am event is not full compensation, but the owners desire to 
keep their land and not to sell it nor have it taken away from them. 

The object of this petition is to .net relict in two respects: First, temporary 
relief; second, permanent relief. 

The temporary relief is based upon the fact that the district attorney of the 
northern district of Illinois is about to call up the condemnation proceedings for 
trial. These condemnation proceedings were hied June 30, 1919. 

The owners believe that upon a careful study of the situation it will be found 
that the lands owned by them are not necessary for use as a part of Camp Grant, 
and that it will be found by the Government that it does not desire to have the 
same. 

The temporary relief asked, therefore, is that the proper officers be directed to 
instruct the Department of Justice to temporarily hold up the condemnation pro- 
ceedings until a full investigation can be made by the Government. The per- 
manent relief asked will be found at the close of this petition. 

There is a plat attached to this petition which shows the location of the va- 
rious pieces of land above mentioned. The J. August Johnson land is shown 
as No. 1. the Baldwin land as No. 12, the Samuelson land as No. 3. 

I do not think that I need to go into all of this. I have here a plat 
of Camp Grant, showing the location of these lands. They are wholly 
unnecessary for use in connection with the camp, except that, perhaps, 
a small part of one of the tracts where the waterworks are located 
may be necessary. 

Mr. McKenzie. My understanding is that the water plant is down 
there [indicating] in the extreme corner of this particular tract. 

Mr. Fuller. That is correct, I think. 

Mr. McKenzie. That is, down next to the river. 

Mr. Fuller. Yes 

Mr. Miller. Where is the Government's property? 

Mr. Fuller. This comes up near the city limits of the city of 
Rockford. 



REAL, ESTATE TO COMPLETE ACQUISITION IN CERTAIN CASES. 45 

Mr. Miller. How many acre- arc there in the Johnson tract? 

Mr. Fttllbr. The northern part there is the Johnson tract. The 
J. August Johnson land is located at the extreme northern end of 
that part of the area that had been used under lease in connection 
with Camp Grant. This land is 1 mile south of the southern city 
limits of the city of Eockford. It adjoins land that is platted into 
town lots adjacent to the city of Eockford. It consists of 233 acres, 
the fee to which the Government is endeavoring to condemn. 

Mr. Miller. That is the first tract \ 

Mr. Fuller. Yes. Some of this Johnson tract of land, by reason 
of its ideal location along- the river, is worth from $1,000 to $1,500 per 
acre, and the remainder of the land, by reason of the proximity of 
the factory district, is exceedingly valuable. 

Air. McKenzie. It is true that the great manufacturing district 
of Eockport lies right off to the northeast ( 

Mr. Fuller. Yes. 

Mr. Miller. How large a place is Rockfordl 

Mr. Fuller. It has about 60,000 population, and land is very 
valuable in there. 

Mr. Miller. There are 233 acres in the Johnson tract. Which 
is the next tract \ 

Mi'. Filler. The Baldwin land is located as shown upon the 
plat, immediately to the south of the Johnson land above mentioned, 
and joins the same, but extends east to the Meridian Road, and with 
the Johnson land forms a part of the northernmost end of the 
cam}), being that part of the camp next to the city of Eockford. It 
is located .1(10 rods south of land that is platted into town lots im- 
mediately adjacent to the city of Eockford. This land is made up 
of four 44-acre tracts end to end, east and west, extending from Rock 
River easterly to the Meridian Road, which is a state-aid cement 
road, and which adjoins it on the east. 

There is also another State-aid cement road running through the 
land. The tract consists of 162.94 acres. 40 acres of which has 76 
rods river frontage on Eock River, causing the land to be exceed- 
ingly valuable, being worth from $1,000 to $1,500 per acre. The 
remainder of the land is excellent farm land located in the near 
proximity of Eockford. which makes it worth from $600 to $800 
per acre. There is one set of farm buildings on this land in ex- 
cellent condition, some of which buildings were new when the camp 
took possession of the land. The buildings are conservatively esti- 
mated to be worth $12,000. Two railroads cross the land. The 
Government has had the land under lease since 1917, and has oc- 
cupied it up to the present time. The principal activities of the 
camp now take place south of the land in question. There are on 
the land 86 barracks, 7 wagon sheds, 4 warehouses, 24 small living 
quarters, 79 latrines, and like small sheds. These buildings are 
temporary structures, have no foundation, being mostly set on 
posts. The warehouses, however, have concrete piers about 12 
inches square. 

Mr. McKenzie. What is the third tract? 

Mr. Fuller. The third tract is the Samuelson land. This tract 
of land consists of a square 160 acres and a square 40 acres in addi- 
tion thereto, the actual acreage being about 193.09 acres. This land 
is the best piece of farm land in Winnebago County. There is not 



46 REAL ESTATE TO COMPLETE ACQUISITION IN CERTAIN CASES. 

a foot of waste land upon it; it is within 240 rods of land that is 
platted into town lots adjacent to the city of Rockford and because 
of its proximity is worth $600 per acre. This value is arrived at 
from opinions of people who are familiar with the value of it and 
from computations of the value of crops raised upon the farms. 

Along the west side of the land there are two railroads, and along 
the east side there is a State-aid concrete road and on the north side 
of the 160 acres and on the south side of the 40 acres there is a 
macadamized road. The farm has one complete set of farm build- 
ings valued at $10,858. These lands are now occupied as a part 
of Camp Grant, being held under a lease executed in 1917. which 
lease is yet in full force and effect. The Government has, all told, 
20 buildings on the Samuelson farm. Xone of them is large and 
some of them are quite small and insignificant, and all are of tem- 
porary construction. Four of these buildings are now being used 
to store unused cots, five aie being used by families, and the re- 
mainder are unused. This land itself was used last year as polo 
grounds for persons connected with the Army. The 40 acres was at 
one time used as a lumber yard, but the lumber has all been removed 
and there is a small quantity of coal now on the land. 

Referring to the whole body of land, the above tracts of land 
adjacent to each other constitute a compact area in the noithern- 
most extremity of the land that has been used under lease at Camp 
Grant. The Government owns no land north of the Johnson tract 
and no land north of any of these tracts, except 74 acres known as 
the Larson tract. This land, however, can be disposed of at any 
time for more than double the amount the Government paid for it. 

The activities of Cam]) Grant are confined almost exclusively to 
the areas south of the above tracts of land and there are south of 
the above tracts of land, and composing and for the use of Camp 
Grant, approximately 3,337 acres of land. 

South of the land now composing Camp Grant there are many 
acres of land, which, in an emergency, can be used as a part of 
Camp Grant, the land being worth not over a quarter of what the 
above lands are worth. 

The owners of the land above mentioned desire not to sell their 
land at any price, but they are willing to lease the same to the 
Government if it is found necessary to use the same as a part of 
Camp Grant. 

The bill also provides that the Secretary of War be given authority 
to take leases for the lands or any part of them necessary for the 
protection of the Government, to require the removal of any build- 
ings thereon, and for the protection of water mains, etc. 

Mr. McKenzie. I notice also that the bill provides — 

That the owners of said tracts of land, prior to the dismissal of all le^al 
proceedings now pending, shall enter into contract and agreement with the 
War Department covering all rights of removal of Government property at 
the expiration of the lease, if not removed before the expiration of the lease: 
and also for the protection of the Government in relation to any water mains 
or sewer pipes which may cross any portion of said land. 

Mr. Fuller. I think that the rights of the Government in con- 
nection with those matters are fully preserved by the bill. 

The permanent relief that these petitioners desire is that the 
boundary of Camp Grant be changed so as to exclude therefrom the 



REAL, ESTATE TO COMPLETE ACQUISITION IN CERTAIN CASES. 47 

lands above mentioned, except so far as the waterworks are con- 
cerned, and the Baldwin heirs will make such reasonable arrange- 
ments with the Government for the continuation thereof as may be 
desired and agreed upon. They further desire that the rent which 
is now due be paid to the petitioners immediately. There is now due 
from the United States Government to J. August Johnson, as rent 
for his land occupied by the Government under lease from July 1, 
1919, to July 1. 1921, the approximate sum of $9,320. There is now 
due from the Government to Sarah J. Baldwin, for the use of the 
Baldwin tract above mentioned under lease, the approximate sum 
of $6,517.60 from July 1, 1919. to July 1. 1921; and there is now 
due Charles Samuelson. for rent of the above lands by the Govern- 
ment under lease, the approximate sum of $7,720 from July 1, 1919, 
to July 1, 1921. Interest should be computed on the deferred pay- 
ments of rent at the legal rate. These people have been kept out of 
their lands and turned out of their homes, and have not even been 
getting rent for the last two years. 

Mr. McKenzie. I would like to ask Gen. Carson or Map von dem 
Bussche if it has not been the policy of the Government where con- 
demnation proceedings were pending, or where the requisition of 
lands had been made, not to figure or pay rent from the time that 
such proceedings are commenced, but that the obligation for the land 
is fixed at the time of the filing of the condemnation proceedings, 
covering all the claims of the owners ? 

Gen. Carson. Yes, sir; that is correct. 

Mr. McKenzie, If the lands are condemned they would get the 
price fixed by the jury, but they would not recover any rental from 
the time the Government took possession. 

Mr. Fuller. Suppose the land doubled in value from the time the 
proceedings were commenced until the time the judgment was entered, 
would the Government get the land at its value when the proceedings 
were commenced? 

Mr. Miller. Yes ; that is the universal rule. 

Mr. Greene. It would double in value because the Government 
wants it. 

Mr. Fuller. Here it is due to the growth of the city. 

Mr. Greene. But two years' growth of the city would not double 
its value. 

Mr. Fuller. I did not say that it doubled it, but suppose it did 
double it. The land is becoming more and more valuable as the city 
extends out in that direction. 

Mr. Greene. But the purchase is as of the time when the minds met. 

Mr. Fuller. They have been kept out of their lands for two years, 
and no one has been paid rent for it or anything else. 

Mr. McKenzie. You have lived all your life in that vicinity or over 
in the adjacent county of Boone? 

Mr. Fuller. Yes. 

Mr. McKenzie. And when you were circuit judge you held court in 
the city of Rockford, and are familiar with the surrounding country 
there. What is your honest judgment as to the military necessity for 
retaining these various tracts of land ? 

Mr. Fuller. I do not think there is any necessity whatever for it. 
I think they already have more land there than they ought to have 

50916—21 i 



48 REAL, ESTATE TO COMPLETE ACQUISITION IN CERTAIN CASES. 

without this. I would personally go a good deal further than that 
and say that 97 per cent of the people there would be glad if the 
camp might be abandoned. That applies not only to people in the 
vicinity of Rockford but to the people all around for 25 or 30 miles. 

Mr. Miller. For what reason? 

Mr. Fuller. Crime in the vicinity of Rockford has increased 
enormously. 

Mr. Miller. It has in most cities. 

Mr. Fuller. It has there. In time of peace the people that are 
confined in the camps are not just like the volunteers that you had 
during the war. Hardly a day passes there but what some crime is 
committed in that vicinity, and soldiers from the camp are arrested 
and charged with the crimes. 

Mr. Greene. You sa}^ they are arrested and charged with the 
crimes, but do the soldiers arrested and charged with crimes represent 
any greater percentage or a greater proportion than the civilians off 
the reservation who are arrested and charged with crimes? 

Mr. Fuller. I do not know. For some reason or other there has 
been a very great increase in crime in that vicinity. 

Mr. Miller. This property has increased in value, or has nearly 
doubled in value? 

Mr. Fuller. Of course, a great deal of property has increased in 
value because of the Government's locating the camp there. The 
city of Rockford had more growth undoubtedly when the camp was 
fully occupied; but times are different now, and there is not a great 
number of men there. The buildings are falling down. They are 
temporary buildings and unpainted. 

Mr. Greene. You say that the soldiers who are there now are not 
like the war-time volunteers who were there ? 

Mr. Fuller. I do not want to go into that. 

Mr. Greene. But it may be very pertinent to this discussion, if 
this camp, instead of enhancing the value of property, is a detri- 
ment to the community. 

Mr. Fuller. Some property has enhanced in value undoubtedly 
because of the camp being located there, but the city has grown out 
in this direction, and, undoubtedly, if the camp were abandoned 
that whole area there would be occupied very soon by the manu- 
facturing industries of Rockford. A good many people have un- 
doubtedly made considerable money out of real estate speculations in 
that vicinity, but the great majority of the people of Rockford are 
not interested in those matters. 

Mr. Greene. If there is a real moral menace to the community, 
then it is not merely a question of real estate values. 

Mr. Fuller. I got my information on that matter from the sheriff 
of Winnebago County, and he was very emphatic upon the proposi- 
tion that the camp is a menace to the people of Rockford. 

Mr. Greene. You have been so familiar with court procedure and 
the illogical way in which some people seek to give an explanation 
of such circumstances that you will readily appreciate the other side 
of it, You have probably seen accounts of crimes around about 
military camps in the newspapers, and the headlines frequently read, 
" Ex-service man guilty of forgery," or " Ex-service man commits 
murder." Of course, the impression that is produced on the average 



REAL ESTATE TO COMPLETE ACQUISITION IN" CERTAIN CASES. 49 

mind is that somehow or other everybody in the Army is a bad lot. 
That impression prevails until people stop and call attention to the 
fact that the Army was made up under the selective-service act and 
is composed of the same material that we find in civil life. Now, 
when things are charged up that way to the armed forces, and they 
are referred to as a moral menace, I have seen enough of military 
men as compared with civilians to want to see the figures. 

Mr. Fuller. I do not know how that may be. but they are very 
emphatic in those statements. I do not know that they are worse 
than anybody else, but, as you know, the devil is busy finding mis- 
chief for idle hands to do. I may not quote it exactly, but there is 
a saying of that kind that is very true. When they are idle at the 
camps, or have not very much to do, they are liable to get into 
mischief. 

Mr. Greene. Is it true that they do not have much to do at this 
camp ? 

Mr. Fuller. They seem to get leave whenever they want it, and I 
see them around town. 

Mr. Greene. There, again, is it the same man that is always get- 
ting leave, or is it simply that you see a man in uniform in town? 
That simply represents some soldier on leave. How many men are 
in the garrison on the reservation? 

Mr. Fuller. I do not know, but it is a very small number com- 
paratively. I rode through there last fall and I think at that time 
nine-tenths of the buildings were vacant. The most that I observed 
there where there was anything doing was a very large field out on 
one side where there were several thousand horses. 

Mr. Greene. When the people in the community adjoining a camp 
see somebody in uniform every day, that may create the impression 
that everybody is on leave, or they get the impression that they see 
the same men every day on leave, but, as a matter of fact, the indi- 
vidual man may not get leave except at intervals of several days. 

Mr. Fuller. I understand that. 

Mr. Greene. How much of that condemnation of the military 
forces at these camps do you believe results from a careful considera- 
tion of the facts, or how much of it is founded on fact ? 

Mr. Fuller. I can not say how much of it there is. The sheriff of 
the county was very emphatic in the idea that crime had increased 
in the community there. He was the man who w r as looking after 
those things and knew about the crimes that were being committed. 
Rockford has been in the past as free from crime or anything of that 
kind as any city in the world. It has been almost a model town. 
Of course the increase in population makes a great deal of difference, 
and the large increase in manufacturing industries makes a difference. 

Mr. Miller. On that question of the camp being unwelcome there, 
in my own State one county bonded itself to the extent of $2,500,000 
to buy 88,000 acres of land for a camp. That is Camp Lewis, and my 
own county bonded itself to the extent of $500,000 to purchase tracts 
of land for aviation purposes. 

Mr. Fuller. I have done a good deal of work myself in connection 
with Camp Grant, and I had not intended to say anything about the 
abandonment of the camp. What I am interested in now is this bill 
for the relief of these landowners. 



50 REAL ESTATE TO COMPLETE ACQUISITION IN CERTAIN CASE >. 

Mr. McKenzie. You are in favor of doing away with all unneces- 
sary expenses in connection with the camp without abolishing the 
camp itself? 

Mr. Fuller. Yes, sir. With the amount of land that they already 
own there I do not think they need any more. I do not think they 
need any more land or that they ever will need any more unless there 
is another war and the camp should be used for a large number of 
men. 

Mr. McKenzie. What do you say in regard to this statement, that 
land south of the camp could be purchased ? 

Mr. Fuller. The land at the south end is nothing but ordinary 
farm land, worth probably from $200 to $250 per acre. It is not 
worth anything like this land up near the city. 

Mr. Greene. They could always get this land in an emergency, 
anyway ? 

Mr. Fuller. Yes, sir; surely. There is no question about that, 
and there would be no trouble about buying land at the south end. 
These people have been turned out of their homes and have been 
left without anything for two years now. 

Mr. Miller. Let me ask you a few questions in relation to this 
Johnson site of 233 acres : Prior to the war was that exclusively 
agricultural land? 

Mr. Fuller. I think it was ; yes, sir. 

Mr. Miller. There are 233 acres in that tract? 

Mr. Fuller. Yes, sir. 

Mr. Miller. And that land was devoted purely to agricultural 
purposes ? 

Mr. Fuller. I think so, before the war. 

Mr. Miller. Take the second tract, or the Baldwin tract. 

Mr. Fuller. That was just the same. It was farm land. It was 
used for nothing but farms. 

Mr. Miller. And the Samuelson tract — was that farm land, also ? 

Mr. Fuller. Yes. 

Mr. Miller. And a railroad line crosses this tract north and 
south ? 

Mr. Fuller. Yes. 

Mr. Miller. And it runs along the west side of the Samuelson 
tract? 

Mr. Fuller. Yes. 

Mr. Miller. Was that track constructed before the war? 

Mr. Fuller. Yes. 

Mr. Miller. Is it the main line of some railroad ? 

Mr. Fuller. No ; it is not a main line, but it is a road that has been 
constructed there for a number of years. It runs down to Joliet. 
It is called the Milwaukee & Gary Railroad. I think. 

Mr. Miller. There has been no extra trackage placed on any of 
these tracts of land by reason of the camp activities there '. 

Mr. Fuller. No. 

Mr. Miller. Have you been on this tract of land, or the Johnson 
tract? 

Mr. Fuller. I have been down that street, or down that paved 
street. 

Mr. Miller. What is the character of the Army buildings erected 
on the Johnson tract ? 



REAL ESTATE TO COMPLETE ACQUISITION IN CERTAIN CASES. 51 

Mr. Fuller. On this land there was constructed when the camp 
was made a total of 21o buildings. There were 131 barracks and 
sheds adjoining, 77 hospital buildings. 11 warehouses, 1 Eed Cross 
building, 1 chapel, and 1 Y. M. C. A. building. None of the barracks 
is now in use. About 60 of the sheds are being used ; 20 of the hos- 
pitals are in partial use; all of the warehouses are in partial use; 
and the chapel, Red Cross, and Y, M. C. A. buildings are all still 
being used. 

Mr. Miller. What buildings of a military character were erected 
on the Baldwin tract outside of the pumping station? 

Mr. Fuller. There are in all on the land 86 barracks, 7 wagon 
sheds, 4 warehouses, 24 small living quarters, 79 latrines and like small 
sheds, These buildings' are temporary structures, have no founda- 
tions, being mostly set on posts. The warehouses, however, have 
concrete piers about 12 inches square. Of the buildings above men- 
tioned, 60 of the barracks are being partly used as living quarters 
and 20 are not used at all. Of the wagon sheds, all seven are in use 
for storing old wagons. The sheds are about to fall down. Three 
warehouses are in partial use, and one is not used at all. The entire 
24 small living quarters are being occupied, and a very small part of 
the latrines and like small sheds are being used. 

Mr. Miller. Now, as to the Samuelson tract? 

Mr. Fuller. The Government has, all told, 20 buildings on the 
Samuelson farm. None of them is large, and some of them are quite 
small and insignificant. All of them are of temporary construction. 
Four of those buildings are now being used to store unused cots, five 
are being used by families, and the remainder are unused. The land 
itself was used last year as a polo grounds by persons connected with 
the Army. Forty acres were at one time used as a lumber yard, but 
the lumber has all been removed, and there is a small quantity of 
coal now on the land, which has been dumped there. 

Mr. Miller. Camp Grant is a camp that was installed at the be- 
ginning of the war? 

Mr. Fuller. Yes. The chairman or any member of the investigat- 
ing committee that visited Camp Grant knows a great deal about it 
and perhaps fully as much as I do, or more. 

Mr. McKenzie. Gen. Carson, do you care to say anything about 
this Camp Grant project at this time? 

Gen. Carson. I am not prepared to go into it extensively, but T 
would like to say that the petition that Mr. Fuller has just read to 
the committee was presented to the Secretary of War some time ago, 
and it has been referred to the commanding general at Camp Grant 
for his recommendation as to the necessity for these particular tracts 
of land for military purposes. That report has not yet been re- 
turned. 

Mr. Miller. Do you recall when the report was referred! 1 

Gen. Carson. It left the Quartermaster General's office, I should 
say, two weeks ago. 

Mr. Miller. Who is the commanding general at Camp Grant? 

Gen. Carson. Gen. Bell. 



52 REAL ESTATE TO COMPLETE ACQUISITION IN" CERTAIN CASES. 

STATEMENTS OF MR. WALTER B. BROOKS, PRESIDENT; MR. J. 
HOWARD SUTTON, CHIEF ENGINEER; AND MR. HARRY N. BAET- 
JER, ATTORNEY, CANTON CO., OF BALTIMORE, MD. 

Mr. McKenzie. We will take up the item for the quartermaster 
warehouse at Baltimore, McL, $100,000. We will be glad to hear 
anything that you gentlemen have to say in regard to this item. 

Mr. Baetjer. Mr. Chairman, if I may be permitted to make a 
short statement I will do so, and Mr. Brooks will go more into the 
details. Mr. Brooks is the president of the Canton Co., of Balti- 
more ; Mr. Sutton is the chief engineer, and I am the counsel. The 
Canton Co. of Baltimore is the owner of a large tract of land upon 
the outskirts of Baltimore, a part of which it has developed with 
warehouses, docks, and pier improvements, and it owns and operates 
a railroad, known as the Belt Railroad, entirely around the city of 
Baltimore. It is the largest owner of warehouse, storage, and termi- 
nal facilities at the port of Baltimore, and during the war over 40 
per cent of the trans- Atlantic traffic went over its piers. 

In the spring of 1918 the Government came to the Canton Co. of 
Baltimore and said that they wanted some land for warehouse pur- 
poses for the Quartermaster Department. They wanted to lease the 
ground, and they leased it at their own figures. On that land that 
they leased they erected in 1918 or in the spring of 1919 four big 
frame warehouses with concrete bases. They put in the necessary 
sides, and the buildings were about 1,000 feet long and about 200 
feet wide, the warehouse spaces' being separated by the usual brick 
partitions for protection against fire. They cost a lot of money, be- 
cause a lot of the work had to be done twice. They had to be rebuilt, 
due to the fact that they were built during the severe freezing 
weather of 1918. Some of the flors had to be laid twice on that ac- 
count. In 1919 the Government came along and said that they wanted 
some warehouses, and that they would requisition them. The Canton 
Co. protested against that. Nothing further was done until the 
spring of 1919, when the Government came back and said, " We will 
take over these warehouses, and if you want to present any evidence 
about the values you can present it; but we have made up our 
minds that we need them." 

Mr. Miller. How many acres of land were involved? 

Mr. Baetjer. Roughly, 36 acres. We then came over here to see 
the Government. We first took it up with Col. Collins, who was the 
quartermaster in charge over there at that time, or in charge of that 
entire zone or district. We were referred by him to the real estate 
service department of the Quartermaster Department, and we came 
to a conclusion with them. The Government said that they did not 
want them, but that they wanted to protect their investment. They 
said that if they could protect their investment they would get out of 
them. We said, "All right ; we will make an arrangement by which 
we can buy them." We came to a conclusion with Mr. Hubbard, of 
the real estate department, subject to the approval of his superiors. 
Mr. Hubbard's superiors did not, however, adopt his suggestions. At 
the end of those negotiations we took the matter up with Col. von 
dem Bussche, and we thought that we would come to a satisfactory 
conclusion, but we split in these negotiations upon the question of the 



REAL ESTATE— TO COMPLETE ACQUISITION IN CERTAIN CASES. 53 

amount of interest to be paid on the deferred payments It was a 
very small question, and did not involve a large amount, but at any 
event the plan did not go through. The objections that we make to 
it and the reason why we ask that this committee seriously consider 
whether this money should be appropriated are two : In the first place, 
the Government in their statements to us showed that they did not 
want this property, and their last statement was that they would be 
willing to turn the whole thing over on July 1 1921, and subsequently 
they stated that they could turn them over before the end of this 
year Thev are frame warehouses and have been constructed for 
three years They are on concrete bases or foundations, but are 
frame superstructures. They were used for storage purposes by the 
Quartermaster Department, so that they would be readily accessible 
to the water front in making their shipments. _,,,.,,, . 

Now these warehouses occupy a strip of land of the length of six 
city blocks, and it is so located as to cut our property in halt, Im- 
mediately south of them, there are only 957 feet of head room be- 
tween there and the water front. There is not sufficient room in there 
for storage, warehouse, and shipping facilities As I have said they 
cut our land in half for that tremendous length. The effect of ! that 
is to destroy the development at that point of the port of Baltimore^ 
and that is where the development must be made if the city is to go 
forward The last warehouse we put up in there was built at a 
cost of $2,000,000, and because of the fact that these warehouses are 
in there; occupying that strip, there are only about 951 feet o head 
room for that warehouse at the water front. As I have said, 40 per 
cent of the traffic to Europe goes through our storage warehouses 
and over our docks and piers, and we operate the Belt Railroad clear 
around the city of Baltimore, with the storage warehouses and all 
the things that go with them in the way of loading and unloading. 
The Pennsylvania Railroad Co., with property immediately west of 
our warehouse, in order to get the necessary trackage facilities in 
connection with one grain elevator, have something like eight city 
blocks of head room, but if this bill goes through, a 1 of these ware- 
houses of the Canton Co. located there will have only two blocks of 
head room for the operation of its trackage and other facilities in 
connection with those warehouses. _ 

While that situation is primarily important to the Canton Uo. it 
is also a matter of very serious importance to the city ot Balti- 
more, because if these warehouses remain there they will mteriere 
greatly with the future development of the port. It it were a ques- 
tion of necessity, or if these were permanent storage warehouses built 
of concrete, or anything of that kind, there might be some justification 
for it, but that is not the case here at all. As I have said, we were in 
negotiation with the Government for the acquisition of this property 
and at the time they were broken off, we were only about $2o,000 
apart. AVe split upon the question of interest on deferred payments, 
or the rate of interest on deferred payments. The Government said 
"We will deliver them July 1, 1921." We say, if that is true, they 
have no need for them. We 'believe, further, that if there is a loss, and 
naturally, there will be a loss, that loss is one that should be charged 
to the war. Of course there was a big loss in nearly everything that 
was done by the Government during that time. The Government s 



54 REAL ESTATE- — TO COMPLETE ACQUISITION IN CERTAIN CASES. 

figures show an investment of something like $1,900,000, but a great 
deal of that construction work was done twice, as I have explained, 
and I think that is something that should be charged against the war. 

Mr. Miller. What was on this land when the Government took 
possession of it? 

Mr. Baetjer. Nothing ; it was bare land clear down to the water's 
edge. The map will show that our development is 200 feet west of 
this. 

Mr. Miller. What land do you own to the right and left it ? 

Mr. Baetjer. We own a considerable tract to the left. That is a 
tract of vacant land going south toward Sparrows Point, where the 
plant of the Bethlehem Steel Corporation is located. To the west 
we own isolated tracts. We own a warehouse over there, and next to 
that comes the Pennsylvania Railroad's grain elevator. To the west 
of that the ground is in miscellaneous ownership. 

Mr. McKenzie. What was the amount of the consideration asked 
by the Government ? 

Mr. Baetjer. $300,000. 

Mr. McKenzie. For what purpose did you intend to use it \ 

Mr. Baetjer. We thought that we would try to divert some tobacco 
storage warehousing in there and try to make it pay, or we figured 
that we could lease them out in small lots under contracts that we 
could terminate shortly. These buildings are of frame construction. 

Mr. McKenzie. Is your company still of the same mind, or are 
you willing to pay the $300,000 ? 

Mr. Baetjer. I think you must appreciate that negotiations made 
to-day must be different from negotiations made last June, but we 
are willing to go into negotiation with them now. If we have to lose 
money, then we will have to lose it. It would be better to lose money 
than to have this situation that so seriously interferes with the port 
development at Baltimore. 

Mr. McKenzie. In your statement with regard to the location of 
these warehouses, you referred to the detrimental effect that they 
would have upon the operations of your company, and to the fact 
that they interfered with other developments there. Now, that situa- 
tion would be just the same to-day as it was a year ago or two years 
ago. 

Mr. Baetjer. We would be getting some salvage out of them, or 
we would hope to do so. In 1919 our warehouses and other storage 
and port facilities were full, and it was our purpose to divert some 
of the storage to these warehouses. At the present time our ware- 
houses are comparatively empty, but we do not think that that is to 
be a permanent condition. We would be willing, of course, to dicker 
with the Government and try to come to some conclusion about it. 
One suggestion that was made was to the effect that if the Govern- 
ment took them over they could lease them to the Pennsylvania Rail- 
road, and that they would operate them in competition with us in 
the warehouse and storage business at Baltimore. In the first place, 
they could not operate them in connection with their own line, be- 
cause they are on our railroad. We do not believe that anybody 
wants them. and. even assuming that they could lease them, we cer- 
tainly do not believe that the Government should enter into competi- 
tion with private enterprise if it can be avoided. 



REAL, ESTATE TO COMPLETE ACQUISITION IN CERTAIN CASES. 55 

Mr. McKexzie. But it would be worth something to your company 
to avoid that competition, and that would be an element in enhancing 
the value of those buildings to the Government when it came to the 
question of selling them to your company. 

Mr. Baetjer. If they should undertake to do there what we under- 
stand they are trying to do at Norfolk — that is, to enter the storage 
business under an arrangement whereby all the overhead expense is 
charged against the Government — it would not be fair or reasonable 
competition. If we have to compete against the United States Gov- 
ernment under those conditions, of course, they can break us. So 
long as they can operate a storage business in these buildings, or as 
long as these buildings last, they can certainly take storage away 
from concrete storehouses. If it is a question of competing with the 
Government on those terms, of course we could not do it: but that 
is not a position in which we ought to be placed. We ought not 
to be required to compete with the United States Government in the 
storage business, with the overhead expenses of the Government's 
storage business paid out of the Treasury. Now, in the first place, 
we could have said to them, " You can not come in here." and we 
could probably have made other terms with them, or they might have 
come in like anybody else, but the Canton Co., of Baltimore, said. 
" If this is a war need, you can have it." Of course, in that we did as 
anybody else would have done at that time. 

Mr. McKexzie. It is my understanding, and I think it is the 
intention of this committee, that where the Government is renting 
any property for storage purposes they tix their rental rates at 
exactly what the civilian activities in that neighborhood charge for 
the same character of service. 

Mr. Baetjer. I am not familiar enough with storage rates to 
answer that, but Mr. Brooks can give you the exact details of what 
they propose to do at Norfolk in the use of those old storage ware- 
houses. According to the statement that was made by one of our 
employees, whom they took away from us, there is to be no overhead 
charge to be paid by the business at Norfolk. There is to be no 
overhead or interest on the investment, but they have simply the 
operating expenses. 

This arrangement which was made in Norfolk is the same kind of 
an arrangement that they are going to make in Philadelphia if the 
Government is not going to stop it. 

Mr. Brooks, the president of the Canton Co.. would like to be heard 
briefly. 

Mr. McKenzie. We will be glad to hear Mr. Brooks. 

Mr. Brooks. Mr. Chairman, I just brought this photograph along 
to show you what our company has in Baltimore, and from it you can 
see that we are really a live, going concern. During the war we 
handled about 40 per cent of all the overseas shipments going out 
of Baltimore. These warehouses you see here in the photograph are 
our own warehouses. This pier you see here [indicating on photo- 
graph] is 1,750 feet long and about 370 feet wide. It is built of con- 
crete, and Ave think it is the best pier on the Atlantic coast. 

My main object in coming before you this morning, Mr. Chair- 
man, is this : This whole proposition is of value, of course, to the 
company, because we have expended a good deal of money on it. but 
it is also of great value to the port of Baltimore. 



56 REAL ESTATE TO COMPLETE ACQUISITION IN CERTAIN CASES. 

Mr. Baetjer has just touched on the subject of the Government's 
action in connection with warehouses. That is becoming a serious 
thing and one which has given us and others who are in the same line 
of business a great deal of concern. Mr. Baetjer spoke of the situa- 
tion at Norfolk. The Government, through the War Department, 
controls the Army base down there and they have actually entered 
into an agreement with the city of Norfolk. 

Gen. Carson. Have you seen that agreement? 

Mr. Brooks. I have not seen it ; no. 

Gen. Carson. Then why are you going into the details of it when 
you have not seen it? 

Mr. Brooks. Because I happen to be in close touch with the whole 
situation. 

Gen. Carson. You are not in touch with it, evidently, if you make a 
statement such as you did just now, because you are all wrong in 
that statement. 

Mr. Brooks. I am not satisfied that I am wrong on that. 

Gen. Carson. I am, because I drew up the lease. 

Mr. Brooks. Then I will ask you if you will state the substance of 
the terms of the lease. 

Gen. Carson. I will do that later on. 

Mr. Brooks. I will put it in this way, that my understanding is 
that the city of Norfolk has entered into an arrangement with the 
Government whereby they took the warehouses over. 

The reason I said I was in close touch with that situation was 
because they took one of my young men out of my office and put 
him down there and he is now the port officer, and I thought I was 
speaking with some knowledge on the subject. It Avas not just hear- 
say testimony. 

As I understand it, the lease is based on the collection of fees for 
storage and the expenses are taken out of those fees, and if there is 
anything left over, that is divided between the Government and the 
city. You can readily understand that nobody who has a commer- 
cial investment in this sort of plant could compete with the Govern- 
ment under those conditions. 

The other point that has come to my attention lately is this, that 
the War Department has entered into an arrangement with the 
Shipping Board whereby they have taken over another base in 
Philadelphia. There are negotiations going on under which the 
Shipping Board has practically laid out all the flour for export 
passing through that port. You can readily see if the other ports 
have to compete with the Government on that basis, what will hap- 
pen to the business end of the proposition. That is a very serious 
matter, Mr. Chairman and gentlemen, and I am trying to state the 
matter to you as I see it. 

Now, in regard to this special lease, when the Government took 
over this property they entered into a contract with us, which Avas 
agreed upon and signed, under the terms of which the price they 
were willing to pay for the land per annum was fixed. 

After the war was over, they took it up from the standpoint that 
they would requisition this property, notwithstanding the fact that 
they entered into a written agreement with us that they would take 
the property under the terms of the lease, and when the lease ex- 
pired they would turn the property back to us. 



REAL, ESTATE TO COMPLETE ACQUISITION IX CERTAIN CASES. 57 

This property is directly in the path of our improvements. I 
am satisfied that if I had had any fear before the lease was signed 
that the Government would take such action as it has taken I would 
have made an arrangement to locate the Government activities at 
some other point where they would not have been directly in our 
path. 

This company which I represent — the Canton Co. — is a very old 
concern. It was incorporated in 1828, and it has been rather suc- 
cessful. That company has spent a good man}' millions of dollars 
there. We own our own railroad, our own piers and wharves, and 
we do not want the Government in there under those conditions. To 
avoid that we have tried our best to come to an agreement to take 
these buildings off of the Government's hands, with the idea that 
we would control them and utilize them as far as they would go, and 
when we were through with them destroy them, and we believed 
that we would be better off in handling that situation from that 
standpoint. 

In appearing before you this morning it is with the full intention 
of getting your favorable consideration to prevent the War Depart- 
ment going through with this proposed undertaking — to take away 
from us by requisition something we do not want to give them and 
that they are not entitled to. 

Of course, you have the fact before you that the Government has 
spent nearly $2,000,000 on this property. But it was spent for 
war purposes, and it has succeeded in carrying out what it was 
intended for, and has put them in a position where they say, " We 
will requisition this land and take it from you because the land has 
increased in value." 

The value they have arrived at, of $100,000, is a mere bagatelle, 
and that is not a valuation that we would submit to, and we do not 
intend to submit to it. They have just allowed us a valuation on a 
basis of a little over $2,000 an acre on that land, while we have sold 
land in that same vicinity, adjacent to it, to the Pennsylvania Rail- 
road for $8,000 an acre. We do not want to sell that land. We want 
to file with you gentlemen a protest against this action, because it 
is not necessary for the Government to have this land while it is 
necessary for the development of the port of Baltimore, and is 
extremely necessary for the development of my company. 

Mr. Greene. What other corporation or agency is there at that 
port performing the same character of service that your company 
performs ? 

Mr. Brooks. I do not think anyone is in quite the same position as 
we are. We own about 1,500 acres of land, and it was necessary for 
us, with our water front, to build this terminal railroad all around 
the city of Baltimore. It was objected to by the other railroads for 
a long while, and we had a very strenuous fight to straighten that 
matter out and to get that railroad built. It has now become an im- 
portant factor to the port. It has the advantage of offering these ter- 
minals to anyone who wants to occupy them or use them and having 
the privilege of getting cars over the Baltimore & Ohio, the Pennsyl- 
vania, or the Western Maryland Railroads on a flat rate. 

Mr. Greene. You do a warehousing, a stevedoring, and a lighter- 
age business? 



58 REAL ESTATE TO COMPLETE ACQUISITION IX CERTAIN CASES. 

Mr. Brooks. No ; we do not do a lighterage or a stevedoring busi- 
ness. That is all done by other companies who have come in there. 

Mr. Greene. You simply deliver at the pier head ? 

Mr. Brooks. We deliver at the pier head and receive at the pier 
head. We are handling to-day practically all of the ore business that 
goes to Pittsburgh through the port of Baltimore. 

Mr. Greene. You are a warehousing and a transfer company ? 

Mr. Brooks. Yes, sir. 

Mr. Greene. You have practically got a monopoly at the port of 
Baltimore? 

Mr. Brooks. A monopoly ? 

Mr. Greene. On that end of the business. There is no other agency 
performing the same sort of service, is there ? 

Mr. Brooks. The Pennsylvania Railroad has its terminal, the 
Baltimore & Ohio Railroad has its terminal, and the Western Mary- 
land Railroad has its terminal. This is a terminal that was built and 
used to develop this land, and it has been very successful, because we 
have created quite a line of business there that was never there before. 
We have built large bins for the receipt of sulphur, and Baltimore 
has become the distributing point for the Middle West for sulphur. 

Mr. Greene. Then, if the trunk-line railroads themselves do their 
own warehousing and transfer work you must depend largely upon 
strictly ocean business? 

Mr. Brooks. No, sir ; we do a large ocean business, but we also do 
more or less of a local business. Take the sulphur business, for ex- 
ample. We have become a factor in this sense, that we have a posi- 
tion there that no one else has, and we have one railroad that offers 
the same facilities offered by all the other railroads without any 
shifting of freight. 

Mr. McKenzie. Is this a belt-line terminal? 

Mr. Brooks. It is practically a belt-line terminal. We are quite a 
factor in the business of the port of Baltimore in its pier develop- 
ment, and we do not want those warehouses left there. 

Mr. McKenzie. Have you any connection with any shipping line 
or airy ocean liners? 

Mr. Brooks. We have several of them. We have one concern that 
has opened up there, which is doing a good business, I am very glad 
to say. We had three of them, but all of them except this one are 
broke, and this one concern is doing a good business, operating be- 
tween California and our port. 

Mr. McKenzie. Does your company own any stock in that line ? 

Mr. Brooks. No, sir. 

Mr. McKenzie. Do the owners of that line own any stock in your 
company ? 

Mr. Brooks. No, sir. 

Mr. McKenzie. Do any of the shipping lines own stock in your 
company ? 

Mr. Brooks. No, sir ; we have always kept very free of that. We 
do not own any stock in the railroads or the ship companies ; we own 
our own property and operate on that basis. 

Mr. McKenzie. Then you have to look for your business in com- 
petition with the Pennsylvania Railroad, the Baltimore & Ohio Rail- 
road, and the Western Maryland Railroad? 

Mr. Brooks. Yes, sir. 



REAL ESTATE TO COMPLETE ACQUISITION IX CERTAIN CASES. 59 

Mr. Miller. Is there any combination of rates? 

Mr. Brooks. No, sir. The way we get our recognition from them, 
our receipts from them, is that they make us a very liberal allow- 
ance, 28 cents a ton. for handling their cars and delivering to them 
at our junction points. It has been a very successful pro position 
because it has really produced something that very few ports have. 

Mr. Miller. You get the overflow from those different lines in case 
they have no storage facilities to take care of that stuff themselves? 

Mi-. Brooks. At first, we were looked upon as suckers, but now we 
are looked upon as producers. 

Mr. Baet.ter. We have a lot of industries on our line that the Penn- 
sylvania Railroad, the Baltimore & Ohio Railroad, and the Western 
Maryland Railroad can not reach except over our line. For instance, 
all the copper that comes in over the Pennsylvania, over the Balti- 
more & Ohio, and the Western Maryland to Baltimore comes over 
our line before it is delivered. Then, too, all of the Standard Oil 
business goes over our line. So we also handle the switching of all 
cars used by industries that are on what was formerly the Canton 
Co.'s land. 

Mr. McKexzie. Has there ever been an attempt to put a railroad 
across your property \ 

Mr. Brooks. The Pennsylvania Railroad has a terminal on our 
property, and the Baltimore A Ohio and the Western Maryland 
Railroads have connection with our line which is entirely by transfer. 
Here is the Pennsylvania Railroad elevator | indicating on photo- 
graph]. The Pennsylvania has another terminal. 

Mr. Baetjer. The Pennsylvania Railroad, in order to get into its 
warehouse, uses the space of eight city blocks for its storage yard, 
and we say that we can not get in there with only 957 feet headroom. 
This gives us 957 feet to the water front. We own on both sides of 
the Government property. 

Mr. Miller. Where are the Government warehouses now? 

Mr. Baetjer. They are marked in green. 

Mr. Miller. You can not get down to the other side of that 
property now? 

Mr. Baetjer. There are only 057 feet in between there, while the 
Pennsylvania Railroad, in order to get to its dock, uses eight city 
blocks. The only activities we have are port facilities; we do not 
do any other business except with port facilities. 

Mr. Miller. The streets in here run across this property, do they? 

Mr. Brooks. They were allowed to build right straight across. 

Mr. Greene. This, of course, goes back to the time when the old 
port was the scene of the coming and going of brigs and sloops, 
when the land values around the water fronts were what anybody 
might make them rather than what any market might make them. 

Mr. Brooks. Of course, the development of the port itself was 
farther up the basin, and this section is practically a new section 
that has been developed in the last 10 or 15 years. 

Mr. Greene. It has grown up by reason of the extension of in- 
dustrialism on the water front ? 

Mr. Brooks. Yes, sir. The way this company derived the name of 
the Canton Co. was by reason of the fact that the early owners of 
the company were nearly all of them merchants who were trading 
with China and the ships that used to come in there were ships 



60 REAL ESTATE TO COMPLETE ACQUISITION IN CERTAIN CASES. 

that came from China, and these men caJled that section of Balti- 
more Canton because of that circumstance. It may be of interest 
to know that old Peter Cooper was the first president of the Can- 
ton Co. 

Mr. Baetjer. Before we came to any conclusion on the matter of 
price a committee from the War Department came to Baltimore and 
went all over this project. They did that before we got together 
on the proposition of a price. That was not done from here because 
this committee, which was composed of representatives of the Army 
and a civilian representative of the Quartermaster Department, went 
to Baltimore and went over the whole proposition, and although Ave 
did not actually close the matter up we were mighty close to it; we 
were very close together on the matter of price. 

Mr. Greene. Was any reason given afterwards for the failure to 
agree upon a price? 

Mr. Baetjer. Their last proposition was made in August, and we 
were very close together. The proposition was that we would pay 
them $300,000, $30,000 down and $30,000 in each of nine annual in- 
stallments, with interest at 6 per cent on the deferred payments, 
which were to begin on July 1, 1921. Subsequently they said they 
would give it to us at an earlier date. That was the substance of 
their letter. 

Mr. Miller. Who signed that letter? 

Mr. Baetjer. That was signed by Maj. Bussche. 

Mr. McKenzie. Why did you not close with them on that propo- 
sition ? 

Mr. Baetjer. Because we thought when we said we would pay 
$300,000 that then we would be paying all we could possibly pay, 
and when they added interest at 6 per cent on the deferred pay- 
ment, we felt we could not pay that, that we could not possibly get 
out of it and that we would make a loss every year, paying $18,000 
interest. We would have gotten together — as a matter of fact, my 
recollection of it is that at the last interview we had with Maj. 
Bussche we said we would pay 3 per cent interest, and the major 
said, " We can not do that." 

Maj. von dem Bussche. That is true. 

Mr. Baetjer. Then we had gone too far. That was in August of 
last year. 

Mr. Brooks. We could not pay that price to-day, in view of the 
present situation, but at that time theie was some hope that there 
was new business in sight which would warrant us in paying that 
amount. 

Mr. Greene. You are a business man, and I am not. That remark 
of yours made me think of this. You would not pay that price to-day 
because your facilities are not in use. The business prospect is not 
very comfortable now. Still, if you owned a wagon that would be 
good to handle the business that came to you two weeks from now, 
would you sell it at this week's price ? 

Mr. Brooks. That is a matter of judgment entirely. My reason 
for fearing that I would not have as good a margin would be largely 
based on the very conditions that the Government is bringing about 
in these commercial enterprises, and the sooner the Government gets 
out of that business the better it will be. 



REAL ESTATE TO COMPLETE ACQUISITION IN CERTAIN CASES. 61 

Mr. Greene. Whatever may be thrown on the market, the people 
who own and operate agencies like yours do it on a commercial 
basis, so if there is not any business this week you would not prob- 
ably base your charge on what this week's returns were, but you 
would have a series of calendar years in mind. 

Mr. Brooks. If I was going to extend my business I would prob- 
ably base my judgment largely on the figures of the business of that 
date. 

Mr. Greene. You would not extend it at all if you thought that 
was the end? 

Mr. Brooks. That is not extending it. 

Mr. Greene. One reason why you folks would operate this new 
property at all is because the future holds out the promise of good 
business, and you want the Government to sell to you at what the 
market now is. 

Mr. Brooks. The Government has not hestitated to hold the lease 
that they have with us, which was made at their price, and then not 
pay the rental, and then put themselves on record as making a requisi- 
tion, which is one way of saying, " I am going to take this property ; 
I do not care whether you want me to take it or not." But they will 
hear from me before they do that. 

Mr. Greene. Of course, you realize that the Government is an im- 
personal thing? 

Mr. Brooks. Yes; I know that. 

Mr. McKenzie. Gen. Carson, we will be glad to hear you on this 
proposition. 

Gen. Carson. In the first place, Mr. Chairman, the proposition 
upon which Mr. Brooks and his representatives dwelt so strongly 
was made to them last August, in 1920. The situation has changed 
since then, and the War Department now intends to utilize this 
property indefinitely as a storage depot for the Third Corps Area. 

The buildings are now, according to my latest information, prac- 
tically filled, and they have no other place to which to send that 
property, so that the pians of the department now contemplate a 
retention of this property as a part of the permanent establishment. 

The second point I wish to cover is the statement that the Govern- 
ment is able to compete with similar warehousing industries because 
it ignores certain charges, the situation at Norfolk being cited. 

As a matter of fact, the rates which are now charged at Norfolk 
for warehousing merchandise are fixed by the Interstate Commerce 
Commission and the Government is charging the same rates that 
other warehouse people conducting a commercial enterprise are 
charging. The agreement with the city of Norfolk was based upon 
that fact — that is, that the rates charged by the Government would 
be the same rates as those charged by local commercial enterprises 
for similar facilities — and that policy is being pursued at every base. 
Whether or not the Government charges anything for overhead or 
depreciation does not enter into the question at all. 

Mr. Miller. What have you to say in reference to the statement 
which has been made that this property was to be turned back to the 
Canton Co. on July 1 of this year, and that the War Department now 
wants to retain it? When was that brought about? 

Gen. Carson. It was brought about during the past winter. 

Mr. Miller. What condition brought it about? 



62 REAL ESTATE TO COMPLETE ACQUISITION IX CERTAIN CASES. 

Gen. Carson. I am not able to give the reasons exactly, as we got 
our instructions from higher authority. It was a decision made by 
higher authority. 

At the time the proposition was made to dispose of these buildings 
it was thought that they would not be required and that other ar- 
rangements would be made. Since then the situation has changed, 
and now the buildings have been, as I said before, filled with 
material. 

So far as we are advised by the War Department, it is the inten- 
tion to retain that depot as an area storage depot of the Third Corps 
Area. 

Mr. Miller. Those buildings are not adapted for permanent stor- 
age, are they? 

Gen. Carson. The superstructures are not, but they are in fairly 
good shape. The reason why they are in their present condition is 
because of the uncertainty as to whether we would acquire them, so 
we have not kept them up in the shape in which they would have been 
kept otherwise. 

Mr. Miller. Is the Government interested in any other property 
in the city of Baltimore? 

Gen. Carson. We have no other storage place there. 

Mr. Baetjer. You have a tremendous area at Camp Holabird. 

Gen. Carson. That is a motor transport camp and has nothing at 
all to do with storage. 

Mr. Greene. Baltimore is the second port on the Atlantic sea- 
board, or the third port; is it not? 

Mr. Baetjer. It is a third port. New York is the first port, and 
I think Philadelphia is ahead of Baltimore. 

Mr. Greene. The Army is likely to use it to a greater or less 
extent in connection with supplies sent to Panama or the insular 
possessions, is it not? 

Gen. Carson. If it were used for any of them, I think it would 
be. I can not say about that in detail. But. aside from that, it is 
desired by the War Department for area storage. We have general, 
intermediate, and area storage depots. The area storage depot is 
under the control of the corps area commander, and his supplies 
for his troops are supposed to be kept in there, and they can be or- 
dered out by him without any further reference to the War De- 
partment. Then we also have reserve depots, where, reserve sup- 
Elies are kept, and which are subject only to orders from the War 
•epartment. 

Mr. Miller. What would be the reason why an area storage depot 
should be on the water? 

Gen. Carson. There is no particular reason why it should be on 
the water, except that in this Third Corps Area a number of sta- 
tions located on the coast can be reached by water. 

Mr. Greene. Their supplies would not be of the volume or con- 
stancy to make it an economic proposition? 

Gen. Carson. I think not. 

Mr. McKenzie. These warehouses are not located on the water 
front, so you would have to transfer the stores to the water front 
to get them on the ships? 

Gen. Carson. We would. 



REAL ESTATE TO COMPLETE ACQUISITION IX CERTAIN CASES. 63 

Mr. Brooks. They stand right across our line. We could get 
around them, but it would be very inconvenient and make an ex- 
pensive operation. 

Mr. Baetjeb. If it is only a temporary thing-, we can arrange to 
lease it to them, if we have some understanding so that we can get 
through to get to our line. 

Mr. M< Kexzie. My question was prompted by the testimony 
which was given yesterday in reference to the New Orleans ware- 
house which. I assume, is on the dock, and it would be a matter of 
economy for the Government in storing property to be able to ship 
it direct to the storehouse, and then if they wanted to ship it by 
water to Panama they could take it out of the warehouse and put 
it right on the boat. 

M. Brooks. May I explain this to the committee in regard to those 
warehouses ( They are served by three railroads, or by a road work- 
ing in the interest of all of those railroads, with the extremely low 
local rate of about ii cents per ton: so that if they want to transfer 
any of their supplies to the water for water shipment I do not believe 
they could haul it there by truck and compete with that railroad. 
The thing that I want to impress upon the committee is this, that 
there is no desire on the part of the Canton Co. to incon °nience the 
Government in any way, and we could readily supply the Govern- 
ment with a good location at another point in that vicinity. We 
would lose the value of the construction put on there, but when you 
come to consider the business of the port, and I think it is well to con- 
sider it, we ought not to try to do anything that would interfere with 
its development. We are making great progress in port development 
at Baltimore. 

Mr. Miller. That is the point on which I wanted to question Gen. 
Carson — that is, as to the necessity of using these buildings as a sup- 
ply depot. Why could not these buildings be used temporarily, and 
then locate permanent buildings there in the course of few years. 
As I understand it, the superstructures are of frame, but the founda- 
tions are of concrete. 

(yen. Carson. The buildings are on concrete piers or concrete plat- 
forms, and they are the most expensive and valuable parts of the 
construction. 

Mr. Miller. To complete them, or to make them of permanent con- 
struction, you would, of course, make the superstructure there of 
concrete, placing it upon the same platforms or piers? 

Gen. Carson. Upon the same platforms ; yes, sir. At the time the 
property was taken it Avas the only available site for this purpose. 

Mr. Baetjer. Is it not a fact that those concrete pillars will not 
carry anything more than a frame superstructure? Our information 
is that they will not carry anything more than frame superstructures. 
If you want to lease the property so as to get your utility out of it. 
we are willing to lease them to the Government at almost a nominal 
rental. 

Gen. Carson. I think those platforms will carry something like 300 
pounds to the square foot. 

Mr. Brooks. I can probably tell you about the construction there, 

because I constructed those buildings. The construction consists of 

a brick wall that was built with round edges. That brick wall is 

filled in up to the level of the floor. On top of that there is a con- 

50916—21 5 



64 HEAL ESTATE TO COMPLETE ACQUISITION IX CERTAIN CASES. 

crete floor — not a reinforced concrete floor, but a plain concrete floor. 
That construction was made in 191S, and we had a great deal of 
trouble from frost. Some of the floors were laid during a frosty 
period and had to be relaid. They could not be relaid with con- 
crete at all in some cases, because they were too soft, and plank 
floors were put in there. The buildings were of frame construction, 
but of very good material. There was no paint on them. The roofs 
are practically temporary roofs, and the buildings to-day are not 
in good condition. 

Mr. Miller. You constructed the buildings? 

Mr. Brooks. Yes, sir. 

Mr. Miller. Did you have a cost-plus contract? 

Mr. Brooks. Yes, sir. 

Mr. Miller. You did not lose anything on the construction, did 
you \ 

Mr. Brooks. My net result on that was about $1,600,000 worth of 
work with a net profit of $12,000. How I got through I do not 
know. 

Gen. Carson. We have no other similar buildings in that area 
to be utilized, and one reason why we want to keep them is because 
we are there. We spent originally nearly $2,000,000 in the way of 
improvements. That represents not only money spent on buildings, 
but, unless my recollection is wrong, also in filling in the land. The 
land itself has been improved over what it was when we originally 
took it over. It was unimproved marshy land, and it was filled in 
in connection with this construction. If we do not use this we will 
have to obtain storage space elsewhere within this Third Corps 
Area, comprising the States of Maryland, Virginia, Pennsylvania, 
and, I think. North Carolina. I know that there are a number of 
States in that area. More money was spent than was necessary on 
the improvements, but that is water over the dam. We do. how- 
ever, want to get some use or return from the money expended 
there. 

Mr. McKenzie. What do you say about $100,000 being a fair 
valuation ? 

Gen. Carson. T think it is not only fair, but liberal. 

Mr. Baetjer. If I may interrupt for a minute, let me say that 
they have Aberdeen in the same area. The General Utilities Co. that 
has been the lessee of the Aberdeen plant said to have cost $10,000,000, 
including storage warehouses and a cold storage plant, is in bank- 
ruptcy now. That is only 25 miles from Baltimore, on the Pennsyl- 
vania Railroad, at Havre de Grace, and I know that the Government 
is leasing it. They certainly have Camp Meade which is halfway to 
Washington, where they have something over 100 acres. It is true 
that they have no good storage buildings at Camp Meade nor at 
Aberdeen, but the buildings that they have down here are such that 
they certainly will have to rebuild them. If they only want to get 
their utility out of them, for something like five years, we will lease 
them what they want. They have changed on this. Last August 
they did not want them, and if they did not want them last August, 
is it not reasonable to suppose that it is simply a temporary thing and 
that a year from now they will not want them? We are willing to 
lease to them at a nominal rental until they get their utili.tr of 



REAL ESTATE TO COMPLETE ACQUISITION IN CERTAIN CASES. 65 

them. We do not want them to get in our way there so that we can 
not develop the port, and that is really the serious situation for us. 
While it is a serious thin" - to us. it is also a serious thing to the port. 

(Jen. Carson. Aberdeen is an ordnance proving ground, and Edge- 
wood belongs to the Chemical Warfare Service. Camp Meade is a 
division camp, and. therefore, neither of those places is available 
for storage purposes. The assumption as to what we should do is 
entirely a matter of opinion on the part of the gentleman who has 
been speaking. We know what we will do. and we know what we 
will require. The question as to whether this interferes with the 
development of the port at Baltimore is. of course, a matter of opin- 
ion, and, necessarily, they are giving their own private opinions. No 
one who has been over there could possibly believe that its develop- 
ment would be affected by these buildings for '25 or 30 years. It 
can not interfere with them now. considering the unused area that 
they have. 

Maj. vox DEM Bussche. I might relate the negotiations, if the 
committee would care to hear about them. 

Mr. McKenzie. We will be glad to have your statement in regard 
to the negotiations. 

Maj. von DEM Bussche. The property was taken on lease in the 
beginning, and subsequently it was requisitioned. An award was 
made by the War Department's Board of Appraisers, which investi- 
gated the values, of $77,000 for the 35 acres involved. The total 
cost of the construction which was placed on there, including these 
buildings, ;i heating plant, concrete roads. filling the grounds, etc.. 
wns $1,909,000. When the proposition of disposing of this site 
came up, T was chairman of the board that went to Baltimore to 
investigate the matter. Local real estate men and local warehouse 
interests in Baltimore valued the plant as it stood at about $1,000,000. 
That seemed to be excessive, and the board upon its determination 
found that the good market value of the property was in the neigh- 
borhood of $600,000. It has a distinct goin<2; concern value for the 
Canton Co., because they could utilize the plant as it stands. 

Mr. Miller. In connection with their other properties? 

Maj. vox iu'.m Bussche. Yes. sir: and that, I think, is what they 
intended to do. Eventually they made an offer to the War Depart- 
ment to buy it for $300,000, to be paid in 10 annual installments of 
$30,000 each. We had several meetings with them, and finally it was 
decided that we could sell, or that we would sell it, but it was. I 
believe, my own idea that interest at 6 per cent should be charged 
on the deferred payments, because the Government was paying in- 
terest on money itself, and there was no good reason that I could 
see why we should not have the legal rate of interest in the State of 
Maryland on the deferred payments. In considering this whole 
thing, we figured that the 665,000 square feet of space which was 
available, or would be available, for their use in time, could be stated 
at 30 cents per square foot, which would mean an annual income of 
about $200,000 a year. Fixing the life of the buildings at five years, 
there was a value of nearly $1,000,000 that they would make out of 
the property, because it had a going concern value for their use. 
That was one of the reasons that prevented the board from giving 
way on on their proposition for the payment of interest at the rate 



66 REAL ESTATE TO COMPLETE ACQUISITION IX CERTAIN CASES. 

of 3 per cent, that being a counter offer that they made. They would 
not pay 6 per cent, but finally they offered 3 per cent interest. 

I believe all the negotiations ended at that time, because the ques- 
tion of warehousing came up again, and it was decided to retain this 
plant. The investigation of the real estate value at the time the War 
Department took the property over, if I am correct about it, showed 
that two-thirds, or perhaps not so much, of the area was largely 
lowlands and swampy ground that had to be filled in. Of course, that 
filling has greatly increased the value of the land, and the value was 
fixed at that time by local interests or experts who gave testimony 
before the War Department's board of appraisers. The board of ap- 
praisers fixed the value at $77,000 and made an award of that amount. 
The Canton Co. has never recognized the requisition and has never 
accepted any part of the award, but has refused to do so. 

Mr. Baetjer. You never offered it. 

Maj. von dem Bussche. The leasing, of course, ceased legally when 
the requisition was made. At that time, under the law. we could 
not pay any rental on the property that was requisitioned, and there- 
fore from the date of the requisition until now we have paid no 
rental. Legally we can not do that. 

Mr. Miller. That was an appraisal, and the value was fixed at 
$77,000? 

Maj. vox dem Bussche. Yes, sir; that was the award. 

Mr. Miller. Was any offer made to the Canton Co. \ 

Maj. vox dem Bussche. That was the award, and the award was 
sent to them. 

Mr. Baetjer. It was never sent to us. You stated it orally in our 
presence, but we have never been notified nor have we been offered 
the 90 per cent. We have not been notified of the award and there is 
no record in the War Department showing that we have been notified. 
except what you told us. That is the only information we have ever 
had of the award that was made. We have never been offered the 
90 per cent and we dispute the award. 

Maj. vox dem Bussche. As to that, of course, I can not say. I was 
never a member of the board of appraisers. They made their award. 
and the records show that the award was made in writing and was 
approved by the Secretary of War. Whether or not they sent it out I 
do not know, but, so far as we know, the award stands as made. It 
is reasonable to suppose that the company was notified. As I said. 
that award amounts to $77,000. 

Mr. Baetjer. As a matter of fact, you can take it from us that we 
were not notified, and I think the records of the department will show 
that no notice was sent out. The Canton Co. took no part in it and 
has disputed it from the beginning. 

Maj. vox dem Bussche. If the War Department should dispose of 
this property to the Canton Co.. it has a right to expect a reasonable 
return. It is not a question of salvaging it. because it has a going 
concern value to this company, because they are in that same identical 
storage business. That space is extremely valuable to them, and 
anyone could practically control the market for storage by leasing 
this out ft a very much less figure. I do not know what storage space 
is worth to-day in Baltimore, but at the time of those negotiations 
Ave were getting 30 cents per square foot, and that was well below the 



REAL ESTATE TO COMPLETE ACQUISITION IN CERTAIN CASES. 67 

customary rate. The company could have taken this property at 
$300,000 and leased it, or even a portion of it, at 30 cents per square 
foot, and still have made a very handsome profit on an investment of 
$300,000. That was the attitude that the board took in going over the 
figures. 

Mr. Miller. You are acquainted with the property? 

Maj. vox dem Bussche. Yes, sir. 

Mr. Miller. What do you say about the property being in a key 
position whereby it could be used to prevent development on the 
water front \ 

Maj. von dem Bussche. I do not see it that way. There are many 
routes that they could take without going through or over this prop- 
erty. Of course, the development of the Canton Co. is right at this 
property and could go directly through this property, but I can not 
see any reason why it could not be diverted and go around it. This 
property lies right in the center of their property. It consists of 35 
acres in the center, and it is naturally very valuable to the Canton Co. 

Mr. Brooks. Do you recall how much we offered to lease the prop- 
erty to you for per square foot '. 

Maj. vox dem Bussche. I do not know. 

Mr. Baetjer. 15 cents per square foot, as per the letter of April 2, 

Maj. vox dem Bussche. I do remember that question of leasing to 
the Government at 15 cents per foot, but there was a question of why 
the Government should pay 15 cents per foot for facilities that it had 
constructed and owned. 

Mr. Baetjer. We will give you a lease on it until you tear the 
buildings down, to show you that we do not want them. If you will 
not lease them, let us tear them down. 

Gen. Carson. You do not need to tear them down. 

Mr. Baetjer. It is very well to say that, but the best engineering 
people advise us that with that 957 feet of headway we can not go in 
there, and you can not say offhand that it is not so. 

Gen. Carson. I do not say that offhand, and I suggest that you 
have some other engineering talent to go over the figures. 

(Thereupon the subcommittee went into executive session, after 
•which it adjourned.) 



v 



LIBRARY OF CONGRESS 




